India trade body cuts sugar output estimate by 9 percent as drought hits

India is likely to produce 21.3 million tonnes sugar in 2016/17, down 9 percent from an earlier forecast of 23.4 million tonnes, as drought curtailed cane supplies in key producing states, a trade body said on Wednesday.

A drop in production could lift local prices and prompt the world's biggest consumer to allow duty-free imports of the sweetener, supporting global prices that are trading near their highest level in one-and-a-half months.

Sugar mills in top producing western state of Maharashtra and third biggest producing southern state of Karnataka are closing earlier than initial expectations, Indian Sugar Mills Association said in a statement.