Indian sugar futures seen up as mills close early

India sugar futures are likely to open higher on Friday as below-expectation lower production estimates this year got a boost by mills that closed operations early on scarce cane supply, analysts said.

Indian sugar mills, which started crushing late this year, are closing operations two months ahead of season as cane supplies dwindle, industry officials said.

India's farm minister said the country's output may be about 16.5 million tonnes, lower than earlier expectations of about 18 million tonnes and much lower than last year's estimated output of about 26.3 million tonnes.

The April contract NSMJ9 on the National Commodity and Derivatives Exchange ended up 0.32 percent at 2,180 rupees per 100 kg in the previous session.

But, likely rise in supplies from imports of raw sugar may weigh on prices, they said.

The country's raw sugar imports may touch about 650,000 tonnes by early March and total imports may cross 1.5 million tonnes by the year ending September 2009, S.L. Jain, director general, Indian Sugar Mills Association (ISMA) told Reuters in an Interview on Thursday.
SOURCE:reuters