Mumbai: India, set to surpass Brazil as the world’s biggest sugar producer, plans to increase exports next year and may ship as much as half of the sweetener in its raw form, the president of the Indian Sugar Mills Association (Isma) said.

India, until now exporting mostly refined or white sugar, seeks to increase

Swelling surplus: The country plans to increase its exports from next year and may ship as much as half of the sweetener in its raw form.

Increased sales from India may add to global oversupply and weigh down further the price of sugar—the worst performing agricultural commodity in the past year.

The surplus may swell 17% to 14 million tonnes (mt) in the year starting 1 October, according to ED&F Man Holdings Ltd—the world’s largest sugar trader headquartered in London.

“We expect 50% of the total exports next year from India to be raw sugar," Babu said. “Exports will continue irrespective of the global price scenario."

India may export 3.5-4mt of sugar next year, according to Julian Stow, trading director of ED&F Man Asia Pte—a unit of the London-based trader.

Babu declined to say how much India would export next year.

India may have shipped 1.8mt of sugar, including 100,000 tonnes of raw sugar, in the year to 30 September, he added.

Raw sugar prices in New York fell 22% in the past year, while white sugar traded in London has fallen 32% in the same period.

The contract for delivery in March rose 0.2% to 9.64 cents (Rs4.21) a pound (0.45 kg) on the New York Board of Trade.

India may increase sugar production by 15% next year from an estimated record 28.5mt this year, agriculture minister Sharad Pawar said on 23 August.

The area under sugar-cane cultivation rose 6% to 5.1 million ha.

“Production may be around the same level as this year as some sugar-growing regions in the South may report a decline in output because of low prices," Isma’s Babu said.

The record crop this year prompted the Union government to more than double its reserves to 5mt and subsidize exports to prevent a glut.

India usually exports lower quality white sugar to countries such as Indonesia, Pakistan and Bangladesh.

Raw sugar is exported mostly by Brazil and Thailand.

The government may extend a freight subsidy of as much as $35 a tonne given to exporters to boost overseas sales beyond 18 April next year to help mills export more, Babu said.

“I don’t think the incentives will stop, as that is one small relief the mills are getting," he said. “We have requested the government to extend it."

Bajaj Hindusthan Ltd and Balrampur Chini Mills Ltd, two of the nation’s biggest sugar producers, posted losses in the quarter ended 30 June.

Shares of Bajaj Hindusthan have slumped 32% this year, while Balrampur Chini has lost 18% of its market value in the period.