Sugar futures today hit the lower circuit and plunged by three per cent as traders indulged in reducing their positions following the government's decision to impose a limit on the sugar stocks held by a trader.
On the National Commodity and Derivatives Exchange, the sweetener for March contract fell sharply by three per cent to hit the lower circuit at Rs 2,123 per quintal in a turnover of 26,730 lots.
Similarly, the April-month contract for sugar also traded three per cent down at Rs 2,162 per quintal in a turnover of 18,520 lots, while far-month May contract lost 2.32 per cent at Rs 2,236 per quintal with a turnover of 4,890 lots.
Market analysts said the government's decision to impose a limit on the stocks of sugar a trader can keep to check possible hoarding of the sweetener and improve availability of sugar in the market, triggered fresh sell-off by speculators at futures market here.
The Cabinet yesterday approved imposition of a stock holding and turnover limit on sugar for four months.
