Sugar Futures close down on reports of new season crushing to start in the country. Moreover, government is looking to enhance domestic supplies by reduce import duty if the prices domestic market increase. The most-active December sugar contract closed 0.06% down to settle at 3,479 per quintal. Central government is exploring the option of lowering the 40% import duty on the sweetener in its raw form. Sugar mills in India's top producing state Maharashtra are allowed to start crushing operations from Nov. 5, nearly a month earlier than previously fixed commencement date.
The government advanced crushing of sugarcane of fear that large amounts of cane may be diverted for the production of unrefined sugar jaggery and farmers may try to sell their sugarcane to the mills in neighbouring Karnataka state. Due to droughts, sugar production in Maharashtra is likely to drop nearly 40 percent to 5 million tonnes in the 2016/17 season started on Oct. 1 compared with a year earlier.
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