Australia sugar output forecast to rise 10% in 2010

SYDNEY Nov 9 (Reuters) - Australia's raw sugar production could rise 10 percent next year as farmers plant more acres in response to a doubling in world sugar prices this year.

The Queensland Cane Growers Organisation Ltd, which represents most of Australia's cane-growers, estimated on Monday that the 2009 harvest would yield about 4.3 million tonnes of raw sugar while the 2010 crop could produce as much as 4.7 million tonnes, making it the best crop in four years.

Last year Australia, the world's third-largest exporter, produced 4.6 million tonnes of raw sugar of which about 3.4 million tonnes was destined for export markets.

"We're in the last throes of the harvest right now and estimate it will yield only around 30 million tonnes of cane, which is quite low, but the sugar content is at 20-year-plus highs," said the organisation's chief executive, Ian Ballantyne.

Damage caused by flooding at the start of the year and a dry end to the growing period reduced cane yields but the dry weather means the harvest will finish about six weeks early.

The early finish meant the next crop would have a longer growing period which would boost yields in 2010, said Queensland Sugar Ltd chief operating officer John Bird.

"Subject to a normal wet season, all things being equal it should a good crop next year," said Bird.

Queensland Sugar is Australia's largest sugar exporter, managing more than 90 percent of sales from Australia.

Bird said the firm had received about 3 million tonnes of raw sugar to date from the harvest that is now coming to an end.

He expects more acres to be planted as Australian cane growers, just like growers around the world, respond to strong prices which this year reached a 28-1/2-year highs, underpinned by a widening global sugar deficit.

"Farmers are spending a bit of extra money rejuvenating their fields and are planting additional areas with cane as prices at around A$450 ($415.50) per tonne net, at the moment, for the 2010 season provides a very attractive incentive."

Two years ago canegrowers received only A$276 per tonne, rising to around A$330 last year and around A$450 this year, according to the government's commodities forecaster.

Domestic prices have risen in line with rising international prices as India was forced to boost imports after a poor domestic harvest and rain disrupted the Brazilian harvest.

India, the world's largest sugar consumer and second-largest producer after Brazil, is likely to see a recovery in production next year as farmers there also respond to improved prices.

Last week commodities firm F.O. Licht forecast the global sugar deficit would narrow to 5-7 million tonnes in 2009/10 (Oct./Sept.) from a deficit of 9.9 million tonnes in 2008/09.

(Reporting by Mark Bendeich; Editing by ) ($1=1.083 Australian Dollar)