NEW DELHI – Prices of medium-grade sugar fell in all wholesale markets except Kolhapur today as heavy rainfall in the country's western part hit demand, traders said. Rainfall was 223% above normal in Maharashtra today, the India Meteorological Department said.

"Mills are also reducing prices and are over-selling sugar despite the overall sentiment being weak…Demand was also hit because of a recent rise in prices that was based on sentiment rather than physical market fundamentals," said Uttar Pradesh-based dealer Vijay Kapoor.

Sugar prices fell 10 rupees per 100 kg each in Delhi and Mumbai, and 15 rupees per 100 kg in Muzaffarnagar.

"There are no festivals in September and pitru paksha also falls in the second half of the month, which is also a lean period for consumers…," said a Bombay Sugar Merchants' Association official.

Meanwhile, prices were flat in Kolhapur, Maharashtra, because of demand-supply parity.

At 1654 IST, the most-active October raw sugar contract on ICE Futures US was 0.7% higher at 11.09 cents per pound.

International prices rose because investors covered short positions after prices hit a one-year low of 11 cents a pound on Wednesday.

Prices had fallen earlier after Brazil raised the import cap on ethanol from the US under tariff-free quota for a year to 750 mln ltr from 600 mln ltr. The move may reduce sugar-ethanol mix in Brazil's Centre-South region and the country may increase its sugar output this season. 

Following are today's prices for medium-grade sugar, in rupees per 100 kg, in key wholesale markets, and the change from the previous close: