MUMBAI: Sugar futures eased on Tuesday on forecast of surplus production for the fourth straight year, but expectations of a revival in exports due to a weak rupee limited the downside. At 0832 GMT, the key September contract was down 0.23 per cent at Rs 3,019 ($47.5) per 100 kg on the National Commodity and Derivatives Exchange. "For the next season production has been forecast at 25 million tonnes. On top of it there is carry forward stocks of 8 million tonnes. How mills can clear inventory when local demand is just 23 million tonnes?," said a Mumbai-based dealer. "The weak rupee can make exports possible, but to support prices, we need to export 3-4 million tonnes," he said. A weak rupee increases the returns of Sugar exporters. The rupee slumped to a record low in early trade on Tuesday and bond yields hit another five-year high as Asia's third-largest economy bore the brunt of growing money flows out of emerging markets. Sugar output in India, the world's biggest consumer, in the marketing year beginning October 2013 is expected to exceed the current year's 25 million tonnes on the back of good monsoon rains, Farm Minister Sharad Pawar said. Maharashtra and Uttar Pradesh, the top two sugar producers in India, have received more rainfall than normal since the beginning of the monsoon on June 1, weather department data showed, boosting the prospects of higher production. Spot sugar was up Rs 6 at Rs 3,058 per 100 kg at the Kolhapur market in Maharashtra state.

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