Sugar drops on weak world market, ample supplies.

MUMBAI: Sugar futures eased on Wednesday, following a drop in overseas prices and on ample supplies in the local market, though a slight improvement in retail demand and export orders limited the downside.

The key August contract on the National Commodity and Derivatives Exchange was down 0.39 percent at 3,041 rupees ($51.36) per 100 kg at 0837 GMT.

New York raw sugar futures on Tuesday slipped to a three-year low on origin selling of a bumper crop in Brazil.

"The continuous fall in overseas prices is a concern for Indian sugar mills. It can resume imports and make local sugar uncompetitive in the world market," said a Mumbai-based dealer.

Spot sugar edged up 4 rupees to 3,068 rupees per 100 kg at the Kolhapur market in Maharashtra state.

India issued a notification last week to implement a hike in import duty on sugar to 15 percent from 10 percent as the world's top sugar consumer tries to prop up local prices, which are falling due to ample and cheap global supplies.

Sugar output in the 2013/14 marketing year beginning October is likely to drop 5.2 percent from a year earlier to 23.7 million tonnes, compared with a local demand of around 23 million tonnes.

A lack of Pakistani sugar available for exports and strong demand before Ramadan have created opportunities for Indian sales to nearby markets, but the window for foreign sales risks closing soon.

Source : economictimes.indiatimes.com