The food ministry will decide on sugar exports in the marketing year through September 2012 in the first week of November when the peak festival season ends, after reviewing production, food minister KV Thomas said on Wednesday.

?We will take a decision (on sugar exports) in the first week of November after evaluating our production estimates, the international and domestic price situations,? Thomas said.

Late last month, agriculture minister Sharad Pawar said the government needs to announce the sugar export policy as early as the second week of October to help mills gain from high global prices and repay farmers for cane purchases. ?We have to allow exports (in 2011-12)….A clear-cut message needs to be given to sugar mills,? he said. Pawar also rubbished the food ministry?s sugar output estimate of 24.6 million tonne for 2011-12, saying actual production could be around 25.5 million to 26 million tonne.

The food ministry?s output estimate is crucial because the quantity of sugar exports to be allowed in 2011-12 hinges on its production level. India expects to consume close to 22 million tonne in 2011-12, leaving room for some exports, according to government officials. It produced 24.3 million tonne in 2010-11.

The food ministry firms up sugar output estimate each year, while the farm ministry forecasts sugarcane production. According to the agriculture ministry?s estimate released last week, the country?s sugarcane production is expected to rise marginally to 342.2 million tonne from 339.2 million tonne a year before.

?We have to see that supply during the peak festival season is adequate before taking any decision for exports, as food inflation remains high. We don?t want domestic prices to shoot up during Diwali due to any hasty decision,? a senior food ministry official said.

India allowed exports of 1.5 million tonne under the open general licences in 2010-11 in three equal tranches, starting April, after a gap of two years when it faced a shortage. Industry executives had said sugar mills lost out on a chance to maximise export returns by cashing in on soaring global prices in February and March due to the late decision by the government.

Higher output may also enable India to take advantage of a smaller cane crop in Brazil by exporting some quantities in 2011-12. Last month, Brazil?s national secretary of production and agro-energy, Monoel Vicente F. Bertone, had said that the country expected its sugar output to fall to 37.07 million tonne in the crop year through March 2012 from 38.17 million tonne a year before. Global consultancy firm Kingsman has said in a report that India needs to lift government curbs to emerge as a regular exporter in a global market currently dominated by Brazil and Thailand.

Sugar prices in the domestic markets have remained stable in the past five months due to adequate supplies and higher production in 2011-12 will prevent any irrational surge in prices. Ex-factory prices of S30 grade sugar in Mumbai are ruling in the range of R2,782 to R2,865 a quintal on Wednesday.

Sugar mills often blame low sales realisation in the domestic market and the lack of a clear export policy for non-payment of arrears to farmers for cane purchases. Sugar mills paid R40,907.90 crore to sugarcane farmers until June 15 of the 2010-11 marketing year, while R1,656.01 crore remained to be paid, Thomas had said last month.