The country's sugar output dropped 21% year-on-year to 8.55 million tonne (mt) until Wednesday since the marketing year started on October 1, thanks to a delay in crushing by almost a month in Uttar Pradesh and parts of Maharashtra.

However, sugar output until the end of December was down by a sharper 29% y-o-y, which means the gap in output compared with the last year level is narrowing fast, showed the latest data compiled by the Indian Sugar Mills Association (ISMA).

Maharashtra produced 3.1 mt of sugar until Wednesday, down 17.8% from a year before, after crushing 29.4 mt of sugarcane. Sugar output in Uttar Pradesh, the second-largest producer, hit 1.98 mt, down 28% from a year earlier. Mills in the state crushed 22.4 mt of sugarcane, the ISMA data showed.

Karnataka produced 1.6 mt of sugar as of January 15, compared with 2 mt in the same period last year.

Andhra Pradesh produced 3,85,000 tonne of sugar as against 460,000 tonne a year earlier.

ISMA is expected to review this month its initial estimate of the country's sugar production of 25 mt for 2013-14. India — the world's second largest producer and biggest consumer of the sweetener —had produced 25.1 mt of sugar in 2012-13, compared with annual consumption of around 23 mt.

With fourth straight year of surplus production, the country's sugar sector is facing a glut.

Sugar stocks as of October 1 were to the tune of 8.85 mt and with good output forecast for this year, stocks will

continue to pile up and may hit a record 10 mt by April 2014, Ajit Shriram, deputy managing director of DCM Shriram Consolidated, had said earlier.