March 12 (Reuters) - Some Indian buyers have cancelled
import deals to the tune of 100,000 tonnes, helping New York
futures
But analysts say India is likely to resume purchases to build stocks ahead of its September festive season demand peak.
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Here are some key facts about India's sugar sector:
- India is the world's top consumer of sugar and the biggest producer behind Brazil.
- Sugar, a politically sensitive commodity, is heavily regulated by the government.
- The federal government sets the price mills must pay farmers for cane. It also buys 10-20 percent of mills' output below market rates for subsidised sale to the poor and fixes the quantity each mill can sell in the open market.
- The governments of major producing states try to woo cane farmers, a sizeable chunk of their voters, by forcing mills to pay more than the floor price fixed by the federal government.
- India's sugar sector suffers from sharp cyclical swings. Lower output and higher prices trigger a rush to plant cane for the next season, leading to a glut every third year, forcing farmers to swith to other crops.
- To trim bulging stocks, the government gave incentives for exports to mills, leading to a record 5 million tonnes of overseas sales in 2007/08.
- The country swung to a net importer in 2008/09.
- Sugar output in western Maharashtra, the country's biggest producing state, was 4.6 million tonnes in the year to September 2009, helping India churn out 14.7 million tonnes, down 44 percent from a year earlier.
- Output in the second-biggest producer, the northern state of Uttar Pradesh, was 4.1 million tonnes in 2008/09. (Compiled by Mayank Bhardwaj in NEW DELHI; Editing by Clarence Fernandez)