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India has extended by two weeks a deadline for the export of 800,000 tonnes of sugar as annual monsoon rains make it tough for many producers to move stocks from factories to ports, the government said on Friday.

Mills in the world's biggest sugar producer are now allowed to export the sweetener until July 20, the government said in a notification, pushing back a previous date of July 5, which some mills missed after heavy rains impeded transport.

Industry officials welcomed the longer grace period.

"This is a very good step," said Aditya Jhunjhunwala, president of producer body the Indian Sugar Mills Association (ISMA). "A small quantity was stuck, but that will be exported before the new deadline."

India set the July 5 deadline last month, after having curbed exports in May, for the first time in six years.

It capped this season's exports at 10 million tonnes to prevent a surge in domestic prices after mills sold a record volume on the world market.

Now, the government should allow further exports of 1 million tonnes of raw sugar that mills had produced for export before the cap, Jhunjhunwala said.

Additional exports are unlikely to lead to a domestic shortage as a bumper crop is expected next season, he added.

India is set to surpass Brazil to become the world's biggest sugar producer in the marketing year to Sept. 30, ISMA estimates, with output of 36 million tonnes.

As sugar exports are lucrative now, because of firm global prices and a weak rupee currency, the government should announce next season's policy immediately, said Rahil Shaikh, managing director of trading company MEIR Commodities India.

"Mills and traders can sign contracts for next season now," he said. "Even if prices fall after a few months, there won't be any impact on exports."