India's sugar cane acreage is likely to rise in 2011/12 as farmers are still finding the crop remunerative over competing crops, raising hopes the world's biggest sugar consumer will have a surplus for the second straight year beginning October.
Higher sugar output is likely to pressure the government to increase exports limit beyond 500,000 tonnes to support local prices which have fallen 12 percent in 2011, said industry and government officials. Western state of Maharashtra and northern state of Uttar Pradesh are top two sugar producers in the country and account for over 60 percent of the country's total output.
In Uttar Pradesh, area is likely to rise about 10 percent in 2011-12 due to the increase in cane procurement prices and regular and timely payments to farmers by mills, said S.P. Bali, deputy commissioner at state's Sugar Commissioner's office. The federal government fixes minimum price at which millers can buy cane from farmers. It had fixed price at 139.12 rupees (3.11)per 100 kg for 2010/11 season, but most millers bought cane at around 200 rupees per 100 kg. In Uttar Pradesh, most of cane planting takes place between February and May and rest in September-October.
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