MUMBAI: Sugar futures dropped on Monday to their lowest in nearly seven months on sluggish demand amid rising supplies from local production and cheaper imports on the back of a stronger rupee. At 0833 GMT, the key February sugar contract on India's National Commodity and Derivatives Exchange was down 0.58 per cent at 3,077 rupees ($58.06) per 100 kg. It dropped to 3,067 rupees earlier, a level last seen on July 13, 2012. Spot sugar nudged up by 1 rupee to 3,238 rupees per 100 kg in the Kolhapur market in top-producing Maharashtra state. "Supplies are surpassing demand. Everyday, supplies are rising, but demand is weak due to the winter," said Badruddin Khan, associate vice-president of research at Indiabulls Commodities Ltd. A stronger rupee makes imports cheaper, which is a concern for the sugar industry, he added. Demand for the sweetener from bulk consumers like soft drinks and ice-cream makers usually drops in India during the winter season. India's sugar output rose 3 per cent to 13.75 million tonnes on year in the first four months of the season beginning October 2012, a leading industry body said on Monday. Mills in India are expected to churn out 24.3 million tonnes of sugar in 2012/13, down from 26 million tonnes in the previous year, but higher than the expected local consumption of about 22 million tonnes. India has contracted to import 920,000 tonnes of raw sugar since the season began in October, turning into a net importer for the first time in two years despite surplus stocks at home, a senior industry official said.

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