MUMBAI (Reuters) - India, the world's biggest sugar consumer, is likely to produce 27 million tonnes of the sweetener in 2014/15, up nearly 2 percent from the previous estimate, a leading industry body said on Thursday.
Higher production will depress local prices further and increase cane arrears that have already risen to a record 193 billion rupees ($3.10 billion).
"Around 290 sugar mills are still continuing their crushing operations. It seems the country would produce over 27 million tonnes in the current season," the Indian Sugar Mills Association (ISMA) said in a statement.
In March, the industry body said it was expecting production to touch 26.5 million tonnes in the marketing year ending September 30, higher than the last marketing year's output of 24.4 million tonnes.
In September 2014, ISMA had predicted sugar output of between 25 million tonnes and 25.5 million tonnes. The current estimate of 27 million tonnes is as much as 8 percent higher than its September forecast.
By mid-April mills had produced 26.4 million tonnes sugar, up nearly 14 percent from last year, ISMA said.
The surplus production for the fifth straight year has increased inventory and the country is likely to start the next marketing year in October with a carry forward stock of 9 million tonnes, it said.
($1 = 62.3000 rupees)
(Reporting by Rajendra Jadhav; Editing by Biju Dwarakanath)
