MUMBAI: India’s sugar inventories have been depleted by 19% and the country could start the 2021/22 marketing year with lowest the stocks in four years after mills exported a record amount in the current year, a leading trade body said on Wednesday.

Lower inventories could support local prices and may reduce exports in the next marketing year from the world’s second biggest sugar producer, in turn supporting global prices.

India could start 2021/22 marketing year on Oct. 1 with carry forward stock of 8.7 million tonnes, down from 10.7 million tonnes a year ago, the Indian Sugar Mills Association (ISMA) said in a statement.

The country could produce 31 million tonnes of sugar in 2021/22 compared with 30.9 million tonnes in the current season, the trade body said.

The area under sugar cane has risen by around 3% to 5.46 million hectares and the weather is also conducive, but additional cane supply is likely to get diverted for ethanol production, it said.

“With higher ethanol production capacity and continued surplus sugarcane in next year ... approximately 3.4 million tonnes of sugar will be diverted into ethanol next season,” it said.

India plans to achieve 20% ethanol-blending with gasoline by 2025 to reduce its dependence on costly oil imports and slash excessive sugar production.

The south Asian country is set to export a record 7 million tonnes of sugar in the current season, nearly 18% more than a year ago, it said.

In December, India approved a subsidy to encourage cash-strapped mills to export 6 million tonnes of sugar in the 2020/21 marketing year ending on Sept. 30.

A few mills exported sugar without subsidy as they needed funds to make cane payments to farmers, industry officials said.

“Exports have helped to bring down stockpile. In the next season, mills wont be under pressure to export a large quantity,” said a Mumbai-based dealer with a global trading firm.