Indian spot sugar steady on weak demand, crushing delay

MUMBAI, Nov 12 (Reuters) - Indian spot sugar ended steady on Thursday as estimates of lower output and a delay in cane crushing offset weak demand, which is likely to improve in second half of the month, dealers said.

In Kolhapur, a key market in top sugar producer Maharashtra, the price of the most traded S-variety sugar edged lower 0.17 percent to 3,285.75 rupees ($70.4) per 100 kg.

"Demand will start improving from second half of this month due to the wedding season," said a trader based in Vashi spot market near Mumbai.

In the absence of any major festival, demand usually remains subdued in November, traders said.

In the 2009/10 season, lower acreage and poor rains will keep India's output at 15.3 million tonnes, a little more than last year's output of 15 million tonnes, falling severely short of domestic consumption for a second straight year, a Reuters poll showed. See [ID:nBOM546431]

The government had released higher amount of sugar during festivals, and now crushing has delayed in most parts of the country, resulting in "a serious shortage" in short-term, G.S.C. Rao, executive director of the Simbhaoli Sugars, said.

India may import 2.5-3 million tonnes of the sweetener in 2010/11 as domestic output is seen falling short of demand, an industry official said on Wednesday. See [ID:nBOM239926]

($1= 46.67 rupees)

(Reporting by Rajendra Jadhav; Editing by Harish Nambiar)