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India Sugar Output May Miss Forecast, Boosting Prices India's sugar output, the second- biggest in the world, may fall 25 percent next year, more than previously estimated, helping to ease a global glut. Production may total 20 million metric tons in the year to September, 2009, compared with an estimated 26.3 million tons this year, said Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories Ltd. International Sugar Organization this month forecast output at 22 million tons. Raw sugar traded in New York was the worst performer after zinc in the past two years on the UBS Bloomberg Constant Maturity Commodity Index as growers from Brazil to India boosted output after prices rose to a 25-year high. The sweetener gained 14 percent in the past month. ``Farmers have moved away from sugar cane,'' Kumar said in a phone interview. Growers are planting crops including corn, rice and soybeans because of higher prices, he said. Sugar for August delivery on India's National Commodity & Derivatives Exchange rose as much as 3 percent to 1,610 rupees per 100 kilograms. The contract traded at 1,605 rupees at 11:32 a.m. in Mumbai. Raw sugar futures traded on ICE Futures U.S., the former New York Board of Trade, dropped 2.9 percent to 13.59 cents a pound yesterday. The most-active contract closed at a 25-year high of 19.3 cents a pound on Feb. 3, 2006. The National Federation of sugar mills make up nearly half of India's output of the sweetener. · Surplus Global refined sugar production will probably exceed demand by 2 million tons in the 12 months through March 2009, according to Lausanne, Switzerland-based researcher Kingsman SA estimates. Indian cane growers planted the crop across 4.31 million hectares (10.7 million acres) by July 11, 19 percent less than a year earlier, the farm ministry said last week. In comparison, area under rice expanded 6 percent to 9.23 million hectares and soybeans were planted in 23 percent more area from a year ago. Corn climbed to a record $7.9925 a bushel on June 27 amid concerns all-time high crude oil prices may increase demand for biofuel made from the grain, while soybeans reached $16.3675, their highest ever, on July 3 after the U.S. farmers planted less area to the crop. Refined sugar output in the eight months ended June was 25.8 million tons, down from 27.8 million tons a year ago, as harvests in Maharashtra were delayed because of rain, and mills in Uttar Pradesh refused to process the crop because of a price dispute with the state government, the federation's Kumar said. · Exports A smaller crop may halve India's exports to 2 million tons, the Federation's Kumar said. ``We will continue to export sugar next year though the quantity will not be the same,'' he said. ``Removal of export incentives and better domestic prices may discourage exports.'' India's government will end a freight subsidy of as much as 1,450 rupees ($34) a ton on Sept. 30, reducing Indian exporters' ability to compete with Brazilian and Thai suppliers. The South Asian nation may have a stockpile of 12 million tons in the new crop year beginning Oct. 1 and local demand may total 22 million tons, Kumar said.