Union Agriculture Minister Sharad Pawar announced that the sugar productivity for the marketing year (0ctober 1, 2009 to September 30, 2010) would surpass 16 million tonnes mark assisted by higher yield in two key producing states.

Maharashtra is India's top sugar manufacturer and Uttar Pradesh the top sugar cane producer.

On this, Sharad said, "Today there is a change on our expectation on sugar production particularly the agricultural reports we are receiving from Uttar Pradesh and Maharashtra. Compared to earlier information we had received from those governments, now we are getting intimation that there is a change in their assessment."

"This would also lay an overall impact on overall prices. Fortunately, I am witnessing a good change in prices of sugar, particularly raw sugar in the international market for the last three-four days. This all will have a good impact on bringing down the prices of essential commodities down," he added.

Global sugar rates, raw sugar especially, have dropped owing to a sell off by funds after having scaled all-time highs in December 2009.

Strong sugar demand from the Indian market has also been a key driver for New York raw sugar futures SBH0, which had jumped to the highest in almost three decades.

Last week, sources claimed that Indian mills have purchased 3,00,000 tons of sugar during the last month, thereby making the most of a decline in worldwide prices. (With Input from Agencies)