MUMBAI/NEW DELHI: Sugar prices will remain "strong" amid a global supply shortage, India's second-biggest producer said. Shares of sugar millers advanced in Mumbai.

"The demand-supply mismatch should lead to strong prices as we move ahead both globally and domestically," said Vivek Saraogi, managing director of Balrampur Chini Mills, on a conference call today. He didn't forecast a price level.

Sugar has more than doubled in the past year, reaching a 29-year high on January 29 as adverse weather curbed output in Brazil and India, the top producers. Global demand for sugar will exceed supply by 13.5 million tonne season, according to broker Czarnikow Group Ltd. "Globally, the sugar shortage is projected to increase in 2009-2010," Saraogi said.

Sugar production this season may total 15 million metric tonne, lagging consumption of 23 million tonne, he said. The forecast matches estimates from Bajaj Hindusthan, the nation's biggest producer, and Dhampur Sugar Mills.

Demand may reach 24 million tonne in the 2010-2011 season with output climbing to 20 million tonne, Saraogi said.

Prices for immediate delivery at Vashi in Mumbai, India's biggest wholesale market for the commodity, gained 3.4% today, the most since January 5. Sugar added Rs 130 to Rs 4,000 per 100 kilogram, according to Bloomberg data.

Sugar consumption in India, the biggest user, including alternative sweeteners, may exceed 30kg per capita from 26kg at present, Saraogi said.

"I am very, very buoyant on India's growth, and, therefore, I am extremely buoyant on the sugar consumption," he said.

Balrampur Chini's profit climbed to Rs 76.55 crore in the three months ended December, up 49% from a year ago, the company said on January 29.