Jun 29 2009 5:08PM
MUMBAI, June 29 (Reuters) - Indian spot sugar prices edged up on Monday on slight improvement in wholesale demand, but trade was lackluster as dealers were waiting for the government's non-levy quota for July-Sept, traders said.
Wholesale traders stock up on food articles in the last week of the month to prepare for purchases by India's salaried middle class who buy in the first two weeks of the month after receiving wages.
In Kolhapur, a key market in largest producer Maharashtra, the price of the most traded S-variety sugar edged up 0.22 percent to 2,330 rupees per 100 kg.
"The long-term trend is bullish as carry over stocks are lower, rainfall is deficient. But, in short-term, traders are waiting for the September quota," said a trader, based in Vashi market near Mumbai.
Non-levy, or free sale sugar, is sold by millers in the open market, but the quantity each mill can sell is fixed by the federal government on a monthly basis. The trade is expecting the government may release 4.4 million tonnes for the quarter.
India's sugar output in 2009/10 is expected to reach 17.5-18.5 million tonnes, lower than the previously estimated 20 million tonnes, on delay in progress of monsoon, a senior industry official said on Wednesday.
Traders forecast a 45 percent drop in India's sugar output to 14.7 million tonnes in the crop year to September.
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