Aug 31 2009 4:31PM
MUMBAI, Aug 31 (Reuters) - Indian spot sugar prices were treading water on Monday as dealers awaited non-levy sugar quota for September before making big transactions, traders said.
In Kolhapur, a key market in top producer Maharashtra, the price of the most traded S-variety sugar edged down 0.26 percent to 2,835 rupees ($58.1) per 100 kg.
The spot price has risen more a quarter this month, while in 2009 it has jumped 54.2 percent.
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.
"There is uncertainty over September quota and price. If the government sells more sugar through public distribution system it will affect on open market demand," said a trader based in Vashi spot market near Mumbai.
India's Farm Minister Sharad Pawar on Friday said sugar industry has agreed to provide more sugar at lower prices during the festival season to rein in prices. see [ID:nBOM512685]
In August India had released 1.67 million tonnes of sugar in the open market.
The country's peak festival season runs from August to October, when demand for sugar goes up as people consume more sweets and confectioneries.
India's sugar stocks will drop by three-quarters from a year earlier to 2.7 million tonnes on Oct. 1, when the new season begins, a leading industry official said last week. See [ID:nBMA005655]
The government had estimated last month the stock would be 3.5-4.0 million tonnes, down from 10 million tonnes at the beginning of the season last year.
India has put stock limits for big companies, wholesale traders and retailers to curb the hoarding.
($1= 48.8 rupees)
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