By Pratik Parija Dec. 2 (Bloomberg) -- India’s sugar output in the season started Oct. 1 will be “little lower” than 16 million metric tons forecast previously because of a drop in recovery in the nation’s biggest cane-growing states, a producers’ group said. Production won’t be less than 14.7 million tons recorded in the previous year, Samir Somaiya, president of the Indian Sugar Mills Association, told reporters in New Delhi today. Lower-than-expected output in the world’s biggest sugar consumer may support global prices which have almost doubled this year after drought damaged crops in India and excessive rains in Brazil squeezed supplies. Mills in Uttar Pradesh, the biggest cane-growing state, agreed to pay growers as much as 205 rupees per 100 kilograms after offering 190-195 rupees last week, to prevent them from diverting cane to make jaggery, a local sweetener, C.B. Patodia, president of the Uttar Pradesh Sugar Mills Association, told reporters in New Delhi today. As many as 84 of 90 privately- owned units in the state began crushing today, Patodia said. “We hope cane supplies will increase and crushing at all mills will start,” he said. Raw-sugar futures for March delivery dropped 0.6 percent to 22.7 cents a pound in after-hours trading in New York. The price reached 25.43 cents on Sept. 30, a 28-year high. Uttar Pradesh mills have raised prices three times in less than a month to increase supplies after a price dispute caused a month-long delay in start to the season. The revision also comes after opposition lawmakers stalled parliament twice last month, demanding cane farmers must receive more than 130 rupees per 100 kilograms set by the government. To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net

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