SANGLI/SATARA/SOLAPUR: India is set to produce lesser sugar than previously estimated by industry bodies and government agencies, with the cane crop maturing early and losing weight due to weather conditions in key growing regions, farmers and traders told Reuters.

Lower sugar output could prevent the world's second-biggest exporter from allowing additional exports, potentially supporting global prices SBc1, LSUc1, and helping rivals Brazil and Thailand to increase their shipments.

India was estimated to produce 34 to 34.3 million tonnes of sugar in the 2022/23 marketing year ending on Sept. 30, down from last season's 35.8 million tonnes, according to trade bodies last month.

But falling sugar cane yields in top producing Maharashtra state and third-biggest producer Karnataka due to early maturity of the crop has been prompting some trade houses to scale down production estimates further.

"Our current estimate is 33.5 million tonnes. We would not rule out a downside risk to below 33 million tonnes, which would be very concerning for global sugar supplies," Mauro Virgino, head of trading intelligence at Alvean, told Reuters.

Alvean, the world's largest sugar trader, did two extensive field surveys, including one earlier this month, before cutting down the production estimate, Virgino said.

Another global trade house has reduced output estimate to 32.4 million tonnes, anticipating a big drop in Maharashtra's production to around 11.3 million tonnes.

Maharashtra's sugar cane commissioner was expecting the state to produce 12.8 million tonnes.

More than two dozen farmers in the state told Reuters last week that the cane crop has been flowering due to early maturity.

"The cane crop is just 10 months old, but started flowering last month and losing weight," Avinash Thombare, a sugar cane grower from Satara district, said, as he showed the crop with white flowers.

Widespread early flowering, a sign of crop stress, was induced by reduced solar radiation during the cane development period due to abnormal cloudy conditions during the last half of the monsoon season, Alvean's Virgino said.

Sugar mills in Maharashtra and neighbouring Karnataka started to face cane shortage and at least 17 mills in the country have closed operations so far, while another two dozen were expected to close before the end of February, according to a government official, who declined to be named.

The continuous downward revision in output estimate has closed the possibility of additional exports, another government official, who also declined to be named, said.

India has allowed sugar mills to export only 6.1 million tonnes of the sweetener in the current season, down from the record 11 million tonnes exported in the previous season.

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