The government may allow sugar exports over and above the permitted 2 million tonnes if the domestic output surpasses the estimate of 25.3 million tonnes this year, says a report by Rabobank International.

"Depending on final harvest results, the empowered group of ministers (EGoM) may issue additional tranches of sugar exports under open general licence, especially if domestic production surprises to the upside," the report said.

The government has permitted export of one million tonne each in two tranches in 2011-12 marketing year (October-September). The second tranche of sugar export is yet to be notified. Of the first tranche, about 400,000 tonne have already been shipped.

Rabobank expects India's sugar production to be 25.3 million tonnes in the ongoing marketing year, 4 per cent higher than the last year's.

"Our projection for sugar output in India in 2011-12 remains at 25.3 million tonne, with a downward revision for output in Maharashtra being offset by increased expectations for production in Uttar Pradesh," it said.

Rabobank's forecast is higher than the government's estimate of 24.5 million tonnes, but lower than the industry body ISMA's projection of 26 million tonnes. Last year, sugar output stood at 24.2 million tonnes.

Maharashtra's total output may come down by over five per cent year-on-year following reductions in cane yields reported from some districts, it said.

Nevertheless, it added that the state will continue to be the largest sugar producing state again in 2011-12 with an estimated share of 35 per cent of domestic sugar output.

Uttar Pradesh will remain the second largest sugar producing state this year, it said.

Source: economictimes.indiatimes.com