India’s sugar output seen rising to 25 million tonnes in 2017-18

India is expected to produce 25 million tonnes of sugar in the 2017-18 crop year – a 25 per cent jump from the production levels in 2016-17 - on the back of good monsoon rains, say reports.

India's sugar production had fallen to annual consumption levels in 2016-17 and the likely jump to 25 million tonnes could hurt prices and demand, forcing a global slump, a Reuters report quoting the head of India's sugar industry body said.

A fall in demand and prices in the world's biggest consumer of the sweetener could drag down international sugar prices that are already near their lowest in over a year, says the report.

As per industry body Indian Sugar Mills Association (ISMA), Indian mills are likely to produce about 20.3 million tonnes of sugar during year 2016-17, the lowest in seven years, and 19 per cent lower than last year's production of 25.1 million tonnes.

This forced India to import 500,000 tonnes of sugar in the 2016-17 crop year ended 30 September 2016.

"Local supply will be enough to cater for demand. We don't need imports anymore," Reuters quoted Prakash Naiknavare, managing director of National Federation of Co-operative Sugar Factories Ltd, as saying.

With the prompt arrival of south-west monsoon India's monsoon is forecast to deliver normal rainfall in 2017.

"Next season, we are expecting a sharp rebound in Maharashtra's production due to good monsoon rains," said Naiknavare.

Maharashtra, nation's No 2 sugar producer along with No 1 producer Uttar Pradesh account for a major part of the country's sugar production.

Maharashtra's production fell 50 per cent from a year ago to 4.18 million tonnes in 2016-17, but next season's output is expected to surge 62 per cent to 6.8 million tonnes, Naiknavare said.

"Good rainfall last year allowed farmers to increase area under sugarcane. This year as well we are expecting ample rains that will boost yields."

In Uttar Pradesh, sugar production is expected to rise 5 per cent next season to a record 9.2 million tonnes, Naiknavare said.

Meanwhile, the government last week raised the price sugar mills must pay to cane growers in the 2017-18 season by nearly 11 per cent.

That hike in cane prices together with abundant rains could lift the area under sugar cane and boost cane production for the 2018-19 season.