Sugar Production in India Seen at Four-Year High as Farmers Boost Planting

Sugar output in India, the second- biggest producer, may surge to the highest level in four years after farmers boosted planting, potentially increasing exports.

Production may total 25.83 million metric tons in the year starting Oct. 1, according to a compilation of estimates by sugar cane commissioners of 10 states including Uttar Pradesh and Maharashtra, the biggest growers. That compares with 26 million tons forecast by the Indian Sugar Mills Association and 24.2 million tons estimated this year.

Rising production may prompt the government to lift curbs on exports, helping ease a shortage caused by a decline in supplies from Brazil, the biggest producer and shipper. Futures have declined 17 percent this year on expectations of increased production from Thailand, Russia and European Union.

“India will be in a better position to export sugar in a sizable quantity as supplies increase,” Yatin Wadhwana, managing director of Sucden India Pvt., said by phone today.

The government may announce the first production estimate for the 2011-2012 season after a meeting of cane officials from states today, according to Food Secretary B.C. Gupta.

Uttar Pradesh, India’s largest cane grower, may process 70 million tons of cane to make 6.45 million tons of sugar, said Kamran Rizvi, the state’s sugar cane commissioner. Maharashtra, the biggest sweetener producer, may make 9.3 million tons, according to Anil Bansode, the state’s joint director for sugar.

Farmers nationwide planted sugar cane on 5.08 million hectares (12.6 million acres), up 3 percent from a year ago, according to the farm ministry. Cane production may climb to 342.2 million tons in 2011-2012 from 339.17 million tons a year earlier, Farm Minister Sharad Pawar said Sept. 14.

The government plans to announce its policy on exports by Oct. 15 and the nation may allow shipments of more than 500,000 tons in one tranche, Pawar said yesterday.

India allowed mills to export 2.6 million tons of sugar since the start of the season on Oct. 1. Shipments next year may be as much as 4 million tons, according to six producers and traders in a Bloomberg News survey July 29.

To contact the reporters on this story: Prabhudatta Mishra at pmishra8@bloomberg.net Pratik Parija in New Delhi at pparija@bloomberg.net;

To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net; Sam Nagarajan at samnagarajan@bloomberg.net