Indian sugar futures rise on lower output hopes

MUMBAI, July 10 (Reuters) - Indian sugar futures resumed their climb on Thursday, supported by expectation a drop in plantings would lower the output in the coming year.

At 3:50 p.m. (1020 GMT), the July contract NSMN8 on the National Commodity and Derivatives Exchange was up 0.34 percent at 1,476 rupees ($34.25) per 100 kg. The August contract NSMQ8 rose 0.45 percent to 1,546 rupees.

Ravi Bhushan, an analyst in ICICI Direct, said output was expected to decline for two years in a row after a record production of 28.4 million tonnes last year.

Cane acerage in India dropped by 17.2 percent to 4.28 million hectares on July 3 from 5.17 million hectares a year earlier, farm ministry data showed last week.

Trade officials forecast this year's sugar output at 26-27 million tonnes, and further lower at 21-22 million tonnes next year as farmers will be encouraged to switch to grains and oilseeds that fetch higher prices.

Spot prices in the western state of Maharashtra, the country's largest producer, rose 0.5 percent to 1,500.25 rupees. ($1=43.1 rupees) (Reporting by Debiprasad Nayak)