LONDON: India is on track to achieve all-time high sugar exports over two straight seasons, 2011/12 (October-September) and 2010/11, commodities house Czarnikow said on Friday.

"Following the excellent harvest this season, Indian exports will exceed 2.5 million tonnes for the second year in succession, which is a new record," London-based Czarnikow said in a statement. Indian sugar exports in 2010/11 were just over 3 million tonnes.

India is the world's second biggest sugar producer after Brazil, and the world's number 1 consumer. In some years it produces a net surplus and in other years a net deficit of the sweetener, depending on factors such as price and weather.

With the world market trading at a premium to production costs, India has been able to export its sugar surplus profitably, Czarnikow said.

"Indian exports have been helped by strong world market values over the past 18 months," it said. "Previous Indian surpluses coincided with depressed world market values."

Czarnikow said it expected many farmers to stick with sugarcane in 2012/13, rather than plant alternative crops, as the industry outlook was expected to remain profitable.

"The swing cycle is reducing in scale and the widely expected downturn in Indian production in 2012/13 may not occur," said Peter de Klerk, a senior analyst with Czarnikow.

Toby Cohen, Czarnikow director, said, "It seems that farmers have every incentive to stick with sugarcane."

The Indian government has been far more proactive in authorising export tonnages than last year, with 3 million tonnes of sugar exports authorised so far.

This season India is likely to produce just short of 26 million tonnes of sugar which represents almost a doubling of output in three years and an increase of more than 1.5 million tonnes on last year.

This year's production increase has been largely driven by the states of Uttar Predesh and Tamil Nadu.

The key state of Uttar Pradesh is expected to produce almost 7 million tonnes of sugar this year, 1 million tonnes more than last year.

This is due to two successive above-inflation cane price rises, which have seen farmers increase acreage and improve husbandry.

source: ET

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