If the National Federation of Cooperative Sugar Factories Ltd's opinion is anything to go by, sugar output in India, the world's second-biggest producer, may rise to 30 million tonnes in the year to September 30, 2008, from an estimated 28 million tonnes this year.
Raw sugar prices slumped 38% in the past year amid forecast that the global supply of the sweetener will exceed demand.
Record output in India may lower the chances of a recovery in prices.
Global production next year will exceed demand by as much as 9.1 million tonnes, 26% more than its previous estimate, the International Sugar Organisation said on May 15.
Refined, or white, sugar Futures fell 0.2% to $310.8 on Monday at London's Euronext.life, extending the past year's decline to 30%. Raw sugar prices fell 0.1% to 9.79 cent a pound in New York on Monday.
27.63 million tonnes of sugar was produced between October 1 and June 30, up 48% from a year ago as farmers crushed more cane from a record harvest. Domestic supplies may reach 41.5 million tonne, equal to two years of consumption, after including a surplus of 11.5 million tonne from this year's crop.