Sugar extend gains on rising demand

Poor rains in key growing areas, lower release of free-sale quota see August prices surge 1.5%

Buoyed by rising spot markets demand and government's move to allow additional export of the sweetener, sugar rose by 1.50 per cent in futures trade today.

Deficient rains in key growing regions and release of lower-than-expected free-sale quota for July-September quarter by the government also supported the rise in sugar prices.

At the National Commodity and Derivatives Exchange, sugar for delivery in August traded Rs 48, or 1.5%, higher at Rs 3,249 per quintal, with an open interest for 35,410 lots.

July sugar delivery also traded Rs 36, or 1.14%, higher at Rs 3,200 per quintal, with an open interest of 1,920 lots.

Market analysts said the persistent rise in sugar futures was mostly driven by strong buying by bulk consumers in the spot market as demand goes up during summer and the government's decision to allow export of an additional 4,476 tonnes to the US in the current marketing year.