MUMBAI, Dec 10 (Reuters) - Indian sugar edged higher on Monday, extending gains to hit its highest level in a week, as a key producing state fixed a higher price for farmers, after a delay in crushing amid limited supply.
* India's top cane producing Uttar Pradesh state raised the price sugar mills must pay for the new season crop by upto 16 percent to 290 rupees per 100 kg, which could encourage farmers to plant more.
* "There is some recovery in sugar prices due to higher price fixed in Uttar Pradesh," said Chowa Reddy, a senior analyst at JRG Wealth Management, and advised buying at 3,300, for a target of 3,330, with a stop loss of 3,280.
* The key January contract on the National Commodity and Derivatives Exchange (NCDEX) was trading 0.33 percent higher at 3,306 rupees ($60.69) per 100 kg at 0918 GMT, after hitting a high of 3,312 rupees, the highest since Dec. 3.
* Spot sugar edged down 18 rupees to 3,347 rupees per 100 kg at Kolhapur in top-producing Maharashtra state.
* The government has allowed sugar mills to sell 7 million tonnes of sugar in the open market between December and March, including 200,000 tonnes of unsold stock from the October-November period, higher than the average monthly allocation of about 1.7 million tonnes.
$1 = 54.4750 Indian rupees Reporting by Siddesh Mayenkar; Editing by Sunil Nair