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India's top sugar-producing state, Maharashtra, could churn out nearly 16% less sugar than the previously estimated as mills are closing early due to limited availability of sugar cane, a senior state government official told Reuters on Monday.

Lower sugar output could prevent the world's second-biggest exporter from allowing additional exports, potentially supporting global prices and allowing rivals Brazil and Thailand to increase exports.

The western state of Maharashtra, which accounts for more than a third of India's sugar output, could produce 10.7 to 10.8 million tonnes in the 2022/23 marketing year that began on Oct. 1, down from an earlier forecast of 12.8 million tonnes, Maharashtra's sugar commissioner Shekhar Gaikwad said.

"Mills are closing at a rapid pace. Almost all mills will close by this month end. Only a handful will be operational in the first week of April," Gaikwad said.

Sugar mills in Maharashtra were operational until mid-June in 2021/22 as they harvested a record crop.

Maharashtra, which often surprises the global sugar market with wide swings in production, has produced 10.38 million tonnes of sugar as of March 26, lower than the last year's 11.6 million tonnes during the period.

Out of 210 sugar mills that started operations this year, 155 mills had stopped crushing as of March 26.

In 2021/22 Maharashtra produced a record 13.7 million tonnes, higher than an initial estimate of 11.2 million and allowing New Delhi to export a record 11.2 million tonnes.

India allowed mills to export only 6.1 million tonnes in the current season in the first tranche. The industry was expecting the government to allow additional exports of around 2 million tonnes in a second tranche.

"The sharp drop in Maharashtra's production means there won't be additional exports," said a government official, who declined to be named.

India mainly exports sugar to Indonesia, Bangladesh, Malaysia, Sudan, Somalia and the United Arab Emirates.