Raw sugar slid to its lowest level this year on speculation India, the top consumer, won’t need to import as much as previously thought.

While the Indian Sugar Mills Association cut estimates for sugar output this season, it said there’s no need to replace local supply with imports. Stockpiles will be sufficient to meet demand until new sugar arrives on the market in October, it said.

Funds have been reducing bullish bets following a 28 percent jump in prices in 2016, the most in seven years, led by expectations that a drought would boost Indian imports.

"The market chat concerning India seems to be slipping away from the sugar bulls on a daily basis," Tom Kujawa, co-head of the softs department at Sucden Financial Ltd., said in an emailed report.

Raw sugar futures for May delivery fell 3.9 percent to close at 18.4 cents a pound at 1 p.m. on ICE Futures in New York, the lowest settlement for most-active contract since Dec. 23. The white-sugar contract for May delivery dropped 2.6 percent to $520.3 a metric ton in London. The premium for white sugar over raw prices rose for a 10th day, the longest streak in two years.

Money managers cut their net-bullish wagers on raw-sugar futures and options by 14 percent in the week ended Feb. 28, the most since November, the Commodity Futures Trading Commission data showed. They also cut their net-long wagers on London white sugar.

"Prices remain weak and further declines look likely especially if some more aggressive fund long-liquidation emerges later today," ADM Investor Services said in an emailed report.

Indian output in the year that began Oct. 1 may total 20.3 million tons, ISMA said, compared with a January estimate of 21.3 million tons, as drought hit the states of Maharashtra, Karnataka, Andhra Pradesh and Telangana. Domestic sugar consumption may total 23.8 million to 24 million tons, down from 24.8 million tons a year ago, it said.

Demand is set to fall after Prime Minister Narendra Modi canceled high-value currency notes in an effort to tackle corruption and tax evasion, curbing purchasing power. Consumption was lower in the fourth quarter, probably after the demonetization policy, Karim Salamon, head of analysis at Wilmar International Ltd., said in an interview in Marrakesh last month.