India’s sugar output is likely to drop to a three-year low next season as dry weather in some main growing areas of the western region cuts planting.

Production may decline to less than 30 million tons in the year that begins on October 1 from an estimated 31.5 million tons this season, said a top official of the National Federation of Cooperative Sugar Factories Ltd (NFCSF), Bloomberg reported.

India produced record 32.5 million tons in 2017-18, according to the Indian Sugar Mills Association.

A drop in harvest for a second year will potentially cut overseas shipments and support global prices that fell 21% in 2018 -- a second straight year of losses -- as booming global output raised concerns about a supply glut. India switches between being a sugar importer and exporter, depending on local output.

A drought in some parts of Maharashtra discouraged planting, the official said. Looking at the pace of planting, it seems that the area under sugar cane will go down. Some areas in the southern Indian state of Karnataka, the country’s third-biggest grower, also suffer from drought, he said.

India’s sugar exports may total 2.5 million to 3 million tons in the year ending September 30 compared with a target of 5 million tons, NFCSF said.

The export window will close before Brazil’s new crop reaches the market in March-April, it said. An increase in the minimum sale price of sugar will also slow down exports, NFCSF noted.

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