India to produce surplus sugar despite crushing delay

Most sugar mills in India have started crushing after a delay of nearly a month due to a dispute with farmers over cane price, but the delay is unlikely to trim the production of the sweetener, a senior industry official told Reuters on Monday.

India, the world's second biggest sugar producer, started the 2013-14 marketing year that began on October 1 with a carry-forward stocks of 8.8 million tonnes and is likely to produce 25 million tonnes this year, compared with its annual sugar consumption of around 23 million tonnes.

The surplus gives India an opportunity to export 3 to 4 million tonnes in 2013-14, but, to make that viable, global prices need to rise from the current level, said Abinash Verma, director general of the Indian Sugar Mills Association.

On Sunday, mills in India's second-biggest sugar producing Uttar Pradesh state temporarily resolved a dispute with the local government over payments to cane farmers.

In the top sugar producing Maharashtra state, mills started crushing on Sunday after a leading farmers' organisation suspended protests that had kept factories idle.