UPDATE 1-India sugar at contract highs after tender scrapped

(Updates to close)

MUMBAI, Feb 19 (Reuters) - India sugar futures extended gains into a sixth day to contract highs on Thursday after state-run MMTC Ltd scrapped an import tender and on talk national output might fall to a lower-than-expected 17 million tonnes.

MMTC scrapped a tender to import 35,000 tonnes of raw sugar because the bids were too high, a government source told reporters on Wednesday. See [ID:nDEL362105]

"Imports might go down on higher international prices. If we don't import then again a deficit problem is going to occur and definitely it is going to push prices on the higher side," said Lopa Sanghvi, an analyst with Anand Rathi Commodities Ltd.

Government and trade estimates suggest India's output will fall by nearly one-third to around 18 million tonnes in 2008/09 crop year ending September from 26.3 million tonnes in 2007/08.

But Sanghvi said some traders expect output could fall to 17 million tonnes as many sugar mills have shut down operations far earlier than last year due to lower cane availability.

The benchmark March contract NSMH9 on the National Commodity and Derivatives Exchange hit a new high of 2,191 rupees per 100 kg.

Spot prices in top producing state Maharashtra rose 0.64 percent to 2,150 rupees.

Following are the closing prices of sugar futures in rupees per 100 kg on the National Commodity and Derivatives Exchange <0#NSM:>