India is to raise its sugar output by 1m tonnes despite a drop in cane plantings, the country's farm minister has signalled in a speech pegging the country's sugar deficit at up to 7m tonnes.

India, the world's biggest sugar consumer and second-ranked producer, will produce 16m tonnes of the sweetener in 2009-10, Sharad Pawar told a conference in New Delhi.

The estimate comes a day after India said that cane production was likely to fall by 8.8% to 249.8m tonnes thanks to the worst monsoon rains in 37 years.

It is also higher than estimates of some analysts, including Rabobank, which last week pegged output at 15.5m tonnes.

Commerzbank said on Wednesday that Indian sugar production would "stagnate at last year's low levels", implying output of about 15m tonnes.

Market squeeze

Mr Pawar added that India's sugar consumption would hit 22.5-23m tonnes, in line with the 2008-09 figure.

With stocks starting the year at 2.2m tonnes, according to Mr Pawar, the data imply a second successive year of brisk imports by India, which had been a net sugar exporter until higher grain prices prompted farmers to switch out of growing cane.

The squeeze has been one factor behind a doubling in sugar prices to their highest in New York for 28 years, and to a record top in London.

Abandoned cane 

Another has been a rain-hampered harvest in Brazil, the world's biggest producer, where industry association Unica has forecast output at 530m tonnes, 20m tonnes short of previous forecasts.

It has been estimated that about 10% of the cane crop � equivalent to 50m tonnes of cane - in the key Centre-South growing region will be left in the field.

"Both quality and quantity of this season's sugarcane crop will be adversely affected by heavy rainfalls," Commerzbank said.

"Unica's crop projection of 600m tonnes of sugarcane for the next crop season is only small comfort,  the more so as India will be forced to import sugar on massive scale this year again."