Sugar prices soared over 5.4 per cent as the Multi Commodity Exchange (MCX) counter relaunched futures trading on Monday after the market regulator lifted the ban after a gap of almost one and half years.
At the MCX counter, sugar for delivery in January-month contract shot up by Rs 184, or 5.44 per cent, to Rs 3,234 per quintal, with a business turnover of 297 lots.
Similarly, the delivery for February contract climbed Rs 178, or 4.75 per cent, to Rs 3,278 per quintal and clocked a turnover of 262 lots.
While delivery in March rose by Rs 143, or 4.51 per cent, to Rs 3,313 per quintal, with a business turnover of 164 lots.
Although the market regulator Forward Markets Commission had lifted the ban on sugar futures from October 1, but it had not allowed exchanges to resume trading.
The MCX has launched six contracts for the month of January to June.
The government had banned sugar futures in May 2009 as part of its measure to control prices of the sweetener.
According to official estimates, after a gap of two seasons, India is estimated to see higher production of 24.5 million tonnes of sugar in the 2010-11 season. This is higher than the country's annual demand of 23 million tonnes.
"Today's trend suggest that the speculators have cheered the relaunching of futures trading in sugar", said an analyst.
Market analysts said speculative activity bolstered the trading sentiment in sugar trading at futures market here.