Rising seasonal demand from ice-cream and beverage makers ahead of the scorching summer months has also contributed to the jump in domestic sugar prices, which hit Rs 3,077 a quintal on Wednesday, the highest since August 2013

Indian sugar merchants are struggling to sign new export deals, as a surge in domestic prices to a seven-month peak and a firm rupee prompt buyers to wait for cheaper supplies from Thailand, dealers said on Wednesday.

Slower exports by the No. 2 producer could support global sugar prices, which have slipped in the past two weeks partly on worries a record Thai output - estimated at 11 million tonnes (mt) - will swell an amply supplied world market.

"It is nearly impossible to strike new deals for white sugar. Indian sugar is too expensive," said Kamal Jain, managing director of Pune-based Kamal Jain Trading Services.

"Even in raw sugar, exports have slowed. Only Iran is buying in rupees. Others are not comfortable with current prices." India is offering white sugar at around $492 a tonne free on board, versus offers from Thailand at $470 for comparatively better grade white sugar, dealers said. Thailand is the world's no 2 sugar exporter after Brazil.

Indian raws are being quoted at $438 a tonne, compared to Thai supplies at $381.

"Two months ago, mills in top producing state Maharashtra were willing to sell sugar below domestic prices. Since the announcement of an exports subsidy for raw sugar, they raised quotes," a Mumbai-based dealer with a global brokerage said.

Indian mills traditionally produce white sugar, but a global glut has made exports difficult. In an attempt to cut down stockpiles, the south Asian country has said it will provide an incentive of Rs 3,300 ($54.82) a tonne for the production of raw sugar for exports.

Rising seasonal demand from ice-cream and beverage makers ahead of the scorching summer months has also contributed to the jump in domestic sugar prices, which hit Rs 3,077 a quintal on Wednesday, the highest since August 2013.