India sugar rises on exports demand, weather

MUMBAI, July 24 (Reuters) - Indian sugar futures rose on Tuesday on good export demand and on concerns poor rainfall in key cane-growing areas could trim next year's output.

* The key August contract on India's National Commodity and Derivatives Exchange was up 1.36 percent at 3,359 rupees ($60) per 100 kg at 1012 GMT. It hit a contract high of 3,395 rupees in the previous session.

* "Rainfall was poor in June and July. It has already hurt the cane crop. Sugar output in next season will be lower than this year," said Ashok Jain, president of the Bombay Sugar Merchants Association.

* Almost all key sugar producing regions in the country have received over 25 percent less rainfall than normal since the beginning of the monsoon on June 1.

* The Indian Sugar Mills Association earlier this month forecast production of 25 million tonnes for the next season starting from October 1, but dealers say achieving that mark is nearly impossible due to poor rainfall.

* India, the world's top sugar producer after Brazil, is expected to produce 26 million tonnes in the 12 months from Oct. 1, 2011 - about 4 million tonnes higher than its annual demand.

* In the Kolhapur spot market in top producing Maharashtra state, sugar rose 4 rupees to 3,402 rupees per 100 kg.

* "Export demand is also helping prices. Exporters have become active in the past few days," Jain said.

* Indian whites, which compete with Thai refined sugar, were on offer at $600 a tonne FOB or above, higher than $590 last week and $520 in late June.

* India has allowed millers to sell 4.5 million tonnes of non-levy sugar from July to September in the open market, unchanged from the previous quarter. Usually, the government increases the quota for festivals.

* 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 quarterly basis to control sharp price swings and ensure adequate supply.

($1 = 56 Indian rupees) (Reporting by Rajendra Jadhav; Editing by Sunil Nair)