Australia, the third largest raw sugar exporter in the world, was set to boost 2004 production by about five percent to around 5.3 million tonnes, industry sources told Reuters on Tuesday.
The besieged industry expects modest output gains this year as the weather improves after last year's drought, they said.
They were speaking, on condition of anonymity, as the industry waited for details of a government rescue package reportedly valued at between A$300 million and A$400 million ($219 million and $292 million), expected later this week.
Australia's sugar industry has been pushed to the brink of collapse by successive years of poor weather, capped by last year's drought, together with persistently low world prices caused by large-scale Brazilian production.
The government decided to assist sugar after its exclusion from the Australia-United States free trade agreement, which would have given it access to the higher-priced US market.
Despite its plunge into loss, Australian raw sugar still forms the third largest bloc of exports in the world after Brazil and Thailand and excluding the 15-member European Union.