The Indian Government plans to create six or seven new sugar mills, provide support for pre-existing mills and introduce new regulations in the north-eastern state of Bihar in an attempt to control spiralling sugar prices in the region, according to press reports.

"Prices in north-eastern India are higher than in other parts of the country, because many mills in Bihar are shut. New mills will be set up," Sharad Pawar, Indian Agriculture Minister, was quoted saying by Dow Jones newswire.

The government aims to restrict average domestic sugar prices to between INR15000 (US$330) and INR21000 a tonne, Dow Jones reported today (23 December).

The government already regulated the quantity of sugar that each mill can sell and Pawar said that it will endeavour to ensure that more sugar reaches provinces where prices are higher than INR21000 a tonne.

These moves will shape India's future levels of sugar production. India's current year sugar output is projected to reach around 18m tons, nearly equalling the estimated local annual consumption of between 18m and 18.5m tons.