Sugar prices recovered by 0.48% to Rs 3,378 per quintal in futures trade today on the back of strong demand from bulk consumers in the spot market even as the government released more sugar in the open market.
At the National Commodity and Derivatives Exchange, sugar for delivery in August traded at Rs 16, or 0.48%, higher at Rs 3,378 per quintal, with an open interest for 34,320 lots.
The September contract traded at Rs 8, or 0.23%, higher at Rs 3,436 per quintal, with an open interest of 36,030 lots.
Analysts attributed the rise in sugar futures to positions created by participants, driven by a firming trend in spot markets as demand from bulk consumers rises during summer. However, government's decision to release 2.9 lakh tonnes of sugar in the open market capped the gains.
Deficient monsoon in almost all key sugar producing regions, which could hurt the output next year, affected the sentiment.
Meanwhile, sugar prices in the wholesale markets in Delhi touched their highest level for the current year at Rs 3,860 per quintal.