April 19, 2017 / 7:42 AM / 4 months ago

Sweet talk: sugar output seen jumping in key Indian producing state

* Maharashtra sugar output seen rising nearly 70 pct in 2017/18

* Comes as farmers plant more cane due to ample rain

* Would follow output slump in wake of El Nino

* Likely to sap demand for imports in world's top sugar consumer

By Rajendra Jadhav

MUMBAI, April 19 (Reuters) - Sugar output in Maharashtra, one of India's key producing states, will likely jump nearly 70 percent in 2017/18 to 7 million tonnes as ample rainfall drives farmers to plant more cane, an industry body told Reuters.

That jump would help push the country's overall sugar production back near consumption levels after a drop expected in the current crop year, ending Sept. 30, in the wake of a strong El Nino weather pattern that prompted severe drought.

Increased output in he world's top consumer of sugar, used to prepare everything from sticky desserts to sweets bought as treats during festivals, could sap demand for imports, dragging on international prices that are already trading near their lowest in 10-months.

"Farmers have raised area under cane for the next season as rainfall was satisfactory across the state," said B.B. Thombre, president of industry body the Western India Sugar Mills Association (WISMA), forecasting the climb in output to 7 million tonnes.

"India will produce enough sugar next season to fulfil local consumption."

Back-to-back droughts look set to curb Maharashtra's production to 4.2 million tonnes in 2016/17 from 8.41 million tonnes the year before, with Indian output expected to plunge 19 percent to 20.3 million tonnes. That would put the nation's production below consumption levels of around 25 million tonnes for the first time in seven years.

"This year production fell due to poor yields. Next year we are expecting improvement in yields," said Sanjeev Babar, managing director of the Maharashtra State Co-operative Sugar Factories Federation, a body for co-operative mills.

India is forecast to receive average rainfall in 2017.

Farmers have also been switching back to growing sugarcane after a drop in prices for oilseeds and pulses dented the appeal of sowing those crops, said Nitin Kalantri, a pulse miller in Maharashtra, in west India.

That means that imports could decline, hitting major suppliers such as Brazil and Thailand, which have this year been benefiting from New Delhi's decision to allow duty-free imports of 500,000 tonnes of raw sugar.

"We will have ample domestic supply next season. We may not need imports," said Balasaheb Patil, chairman of the Sahyadri co-operative sugar factory in Maharashtra. (Reporting by Rajendra Jadhav; Editing by Joseph Radford)

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