Mills in a key sugar-producing state in India are running at half their capacity, which could hit output in the world's biggest consuming country and fuel a further surge in world prices. "The mills are able to utilise only 50 to 60 percent of their full capacity," a senior official of the Sugarcane Development Department in Uttar Pradesh, the country's biggest cane-producing state, said on Thursday.
Mills were crushing an average 400,000 tonnes of sugarcane per day in the northern state, against a combined capacity to crush 772,000 tonnes, government and trade officials said. The local government had banned processing of imported raw sugar since November following agitations by farmers there who wanted better prices for their cane. Analysts say lower capacity utilisation will hit output and force India, the biggest producer behind Brazil, to import more and send global prices further higher.