MUMBAI, Dec 31 (Reuters) - Indian sugar futures were steady on Tuesday as demand remained subdued due to a drop in temperatures amid hopes that the government would provide incentives to mills to produce raw sugar.
* At 0950 GMT, the key February contract was up 0.11 percent at 2,792 rupees ($45.06) per 100 kg on the National Commodity and Derivatives Exchange.
* "Prices will remain range bound in the next few weeks as demand is going down due to falling temperature," said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.
* "Supplies are ample. Prices won't rise unless mills manage to export significant amount of sugar."
* Temperature has fallen below normal level in most parts of the country, the weather department said on Tuesday.
* Demand for sugar from bulk consumers like ice cream and cold drink makers usually drops during the winter.
* Spot sugar was up 3 rupees at 2,853 rupees per 100 kg at the Kolhapur market in Maharashtra.
* The government is likely to announce incentives for raw sugar production this week, dealers said.
* The federal cabinet approved a scheme of interest-free loans to sugar mills, Food Minister K.V. Thomas said earlier this month, as part of a bail-out package for beleaguered mills.
* India started the new sugar marketing year on Oct. 1 with carry-forward stocks of 8.8 million tonnes. It is expected to produce 25 million tonnes this year against a demand of 23 million tonnes. ($1 = 61.9550 rupees) (Reporting by Rajendra Jadhav; Editing by Anand Basu)