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India will make a decision on sugar industry calls for a hike in the minimum selling price (MSP) in the coming days, a senior government official said on Saturday, adding that ethanol policies would be set before the start of the next season.

India, the world's largest sugar consumer, restricted the use of sugar in ethanol production during the 2023/24 marketing year that ends on Sept. 30 and also prohibited exports to keep a lid on domestic prices.

"We are discussing the MSP (proposal). In the coming days, we will hopefully take a call," Food Secretary Sanjeev Chopra told reporters during a conference.

The sugar-processing industry has been demanding an increase in the minimum selling price, saying the government has raised the mandatory procurement price of sugarcane in recent years while the MSP has remained unchanged since 2019.

Industry bodies say a higher MSP would enable them to make timely payments to millions of sugarcane farmers in the upcoming season starting on Oct. 1.

Chopra said the production outlook for the next season has improved due to good monsoon rainfall and increased sugarcane acreage, allowing the government to formulate policies for the next year.

The sugarcane area has edged up to 5.77 million hectares (14.3 million acres) from 5.7 million hectares (14.1 million acres) a year ago, farm ministry data showed.

"We should be having very healthy stocks at the end of the present sugar season, which would allow us to have better planning of its diversion in the next year," Chopra said, referring to sugar's use in ethanol production.

India is expected to begin the new marketing year with carryover stocks of 8 million to 8.5 million metric tons, he said.