NEW DELHI, Sept 21 (Reuters) - Indian sugar futures fell on Friday due to poor demand, higher inventory with mills and forecasts of surplus output in the next season beginning October, traders said.
* The key October contract on India's National Commodity and Derivatives Exchange was down 0.53 percent at 3,566 Indian rupees ($66.32) per 100 kg at 1010 GMT.
* In the Kolhapur spot market in Maharashtra, sugar was steady at 3,565 per 100 kg.
* "Demand is typically subdued towards the end of the month and we know that mills have ample stocks and estimates suggest we have surplus in the 2012/13 season as well," said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.
* Sugar inventory on Oct. 1, when the new 2012/13 season begins, is estimated at 6 million tonnes, up from 5.5 million tonnes in the previous year, the Indian Sugar Mills Association, a producers' body, said.
* For the third year in a row, India is likely to produce more sugar than it can consume domestically in the marketing year starting from Oct. 1, although the exportable surplus will be small, Food Minister K. V. Thomas said.
* In August, India released 400,000 tonnes of additional non-levy sugar for the September quarter, over and above the previous allocation of 4.766 million tonnes, to limit price rise during the festival season.
* Non-levy, or free-sale, sugar is sold by millers in the open market, but the quantity each mill can sell is fixed by the federal government. (Reporting by Mayank Bhardwaj; Editing by Anupama Dwivedi)