Export of sugar 'banned' for up to 3 years by Indian government
"It is unlikely for India to become a sugar exporter in the next three years."
Also from April, domestic prices are set to spike as demand from bulk users such as makers of soft drinks and ice-cream peaks with the start of India's sweltering summer, said Vedika Narvekar, a senior analyst with Angel Commodities Broking.
India's annual sugar output could drop nearly 7 percent to 24.3 million tonnes in the year to September 2013, though this would still exceed domestic consumption of about 23 million, the ISMA estimates.
The higher domestic prices mean India is unlikely to find buyers overseas for its surplus sugar. In fact, mills have been importing raw sugar, drawn by lower overseas prices.
India is likely to import 1.5 million tonnes of sugar in the year to September 2013 and imports will continue next year unless import duty is hiked, sugar broker Kamal Jain said.
India sets a floor price that mills must pay farmers, which individual state governments can increase to ensure returns for a crop that takes around a year to mature.
For this season, the northern state of Uttar Pradesh, India's second-biggest sugar producer, has raised by as much as 16 percent the price mills must pay for cane, while mills in top producer Maharashtra have agreed to pay nearly a fifth more after protests by farmers.
With a general election to be held by early 2014, mills will face pressure to raise cane prices again
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