Subdued domestic demand and high supplies pulled down sugar prices in most wholesale markets today, dealers said. The price of the sweetener was down Rs 10 in the wholesale markets of Maharashtra, while it was down by Rs 25 and Rs 5 in Muzaffarnagar and Delhi, respectively.

“I think sugar prices are likely to fall further in the coming days because I do not see demand improving, since temperature in northern India remains low,” a Delhi-based trader said. The weak demand for the sweetener is linked to the severe fall in temperatures across North India this winter season.

Bulk buyers such as ice cream and cold drink manufacturers are keeping away from the market at the moment. Sugar prices have fallen by around Rs 175 per 100 kg in Uttar Pradesh and by around Rs 50 in Maharashtra in a month. A Mumbai-based dealer said mills are facing heavy selling pressure.

“Supply in the market is increasing as crushing is in full swing,” the dealer said. Mills across the country have produced around 8.55 million tonnes of sugar during October 1 to January 15.

Taking into account an estimated output of 25 million tonnes this season (October-September), total supplies are seen at 34 million tonnes, way higher than 23 million tonnes of annual domestic demand.

Taking cues from the spot market, sugar futures on the National Commodity and Derivatives Exchange ended lower today.

February sugar contract ended at Rs 2,741 per 100 kg, down Rs 17 from Saturday, while the March contract closed at Rs 2,750, down Rs 11 from the previous close.