July 9 (Bloomberg) -- Sugar exports from India, the world's second-largest producer, may double in 2008 because of a domestic surplus, adding further pressure to prices that have plunged 44 percent in the past year.

The country may export as much as 3 million tons next year, Akhilesh Prasad Singh, India's minister of state for agriculture, consumer affairs, food and public distribution said today. Exports may be 1.5 million tons this year, he told reporters at the 9th World Beet and Cane Growers Conference in Brisbane.

Sugar has been the worst performing commodity in the past year as producers from Brazil to Russia increased output after prices rose to a 25-year high in 2006. Global production in the year ending Sept. 30 will exceed demand by as much as 9.1 million tons, the International Sugar Organization said today.

``The Indian surplus is weighing very heavily on the market,'' Nick Wainwright, a Singapore-based manager for Czarnikow Sugar Ltd., the largest broker of the sweetener, told the conference. India is ``struggling to find homes for its sugar, everyone wants to know where the Indian sugar is going,'' he said.

Raw sugar for October delivery on the New York Board of Trade fell 0.1 cent, or 0.1 percent, to 9.54 cents a pound on July 6, down by more than half from the high of 19.73 cents reached on Feb. 3, 2006.

`Surplus Production'

``The surplus production in India lowers international prices,'' New Delhi-based Singh said. ``It's not a good time, but since we have surpluses we have no way but to export, so we'll look for the markets.''

India's sugar output will rise to 30.4 million metric tons this year from 20.9 million last year, research company F.O. Licht said this month. Production may exceed 30 million tons next year, Singh said.

``They can export up to 3 million tons from their infrastructure, but only if the price is right,'' said Peter Baron, executive director of the International Sugar Organization. ``India will not export sugar if prices are $310 a ton or less.''

India is under pressure to export the commodity as record production this year led to a decline in domestic prices. Indian Sugar Exim Corp., an industry-funded trading firm, won contracts to export 200,000 tons of raw sugar to refiners in the Middle East, Bangladesh and Sri Lanka starting December, a company official said on June 13.

Still, Singh's forecast for exports ``doesn't look realistic now as international prices of sugar are low,'' said Vinit Birla, an analyst at Mumbai-based Pranav Securities Ltd.

Brazil is the world's largest sugar producer and exporter.

To contact the reporter on this story: Madelene Pearson in Canberra on mpearson1@bloomberg.net

Last Updated: July 9, 2007 01:55 EDT