India's biggest cane producing state has cut its sugar output forecast by 3.3 percent government sources said on Monday, potentially further delaying any unrestricted exports from the world's biggest consumer. The fall in output now expected in Uttar Pradesh state, which produces roughly a quarter of total sugar output for India, is a result of lower recovery of sugar from the crop and poor cane yield from plantings.
Output in Uttar Pradesh will fall to 6.0 million tonnes in 2010/11 from an earlier estimate of 6.2 million tonnes, the government sources said. The northern Indian state produced 5.2 million tonnes of sugar in the previous year. India is the world's biggest producer behind Brazil.
A panel of ministers is expected to review last month's permission for exports of 500,000 tonnes of sugar under Open General Licence (OGL) as food inflation remains stubbornly high. On Friday, benchmark New York sugar prices surged 1.05 cents or 3.2 percent to close at 34.18 cents per lb, the highest settlement since December 28, 2010, the day before it reached a 30-year high of 34.77 cents. Yield had dropped to 56 tonnes per hectare in the new season that began in October, down from 58 tonnes in the previous year, while this year's recovery rate of 8.91 percent was considered too low, said one of the government sources.
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