The government, Pawar said, was also contemplating raising the quantity of sugarcane that mills owners have to sell to the government at regulated rates. Currently, mills are required to sell 10 percent of their output.

According to government data, sugar stocks dropped to six million tonnes July 31, down 21 percent from the stocks available June 30.

India is the world's second largest sugar manufacturer after Brazil, and the news that Indian production would be low this year has already sent world prices to a 28-year high.