MUMBAI (Commodity Online): Forward Market Commission (MCX) has decided to commence sugar futures trading in India from Monday. MCX has decided to launch six contracts initially as the country revives exports and the government looks for ways to moderate food price inflation.

Earlier in May when the global and domestic sugar prices surged because of a supply shortage, the Govt had banned further trading on sugar until Sept 30, but FMC was yet to take a decision on the starting date for the trading.

"We have allowed them (exchanges) to start sugar futures from Monday. We have given them permission to launch six futures contracts from January to June," B.C. Khatua, chairman of the Forward Markets Commission, Reuters quoted him as saying.

India is second largest producer of sugar after Brazil. This season’s sugar output is speculated to cross 25 million tonnes, which started on Oct 1. Ample rains through monsoon in crop growing areas helped larger output of the crop this season.

As the sugar output may cross the domestic demand for sugar this season, India has already allowed unrestricted exports of 500,000 tonnes of sugar and the market expects more overseas sales as the country swings back to a surplus.

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