NEW DELHI, March 23 (Reuters) - India is likely to allow mills to import duty-free raw sugar next year as stocks at the beginning of the new season in October would have dropped to a third from a year ago, a top industry official said.
Facing a sharp fall in output, India, the world's biggest sugar consumer, last month allowed firms to import duty-free raws up to September 2009 provided mills export an equal quantity of whites within 36 months.
"Raw sugar imports at zero duty should be extended to next year and we believe it will be," the president of the Indian Sugar Mills Association, Samir Somaiya, told reporters on Monday.
India was expected to produce 15.5 million tonnes in 2008/09, he said, revising his estimate last week of 16 million tonnes.
Production would rise next year, but would still be well below last year's output of 26.5 million tonnes, said Somaiya, who heads the body of private sugar producers.
"With the increase in prices, farmers are getting good price signals. We can say production will be 20 million tonnes next year," he said.
Sugar prices in India, the world's second-biggest producer after Brazil, have leapt to 1,987 rupees ($39.39) per 100 kg from 1,680 rupees six to seven months ago, traders say.
Source : REUTERS INDIA