New Delhi: The government will not allow more sugar exports till Diwali as it does not want retail prices of the sweetener to rise during the festive season.

The demand for sugar is generally higher during the October-November period, when festivals like Diwali are celebrated across the country.

"We will take a view on export after meeting the festival demand and looking at domestic price situation," Food and Consumer Affairs Minister K V Thomas said.

The minister said the government would also take into account the production outlook for 2011-12 season, which begins in October this year, before deciding on more exports.

Industry representatives had met Thomas earlier this week to demand for additional exports of 1.5 million tonnes of sugar.

In April, the government had allowed export of five lakh tonnes of sugar under Open General Licence, out of which 51,500 tonnes has been kept aside for the neighbouring countries.

Thomas pointed out that the retail prices of sugar are still fluctuating and in some places, rates are as high as Rs 40 per kg.

According to official data, retail price of sugar in Delhi is ruling at Rs 30-32 per kg.

"The decision on exports will depend on price situation in the retail market and estimates of next year's production," Thomas said.

He, however, said that the government would consider the industry's demand to lift the stock-holding limit on sugar to boost domestic sales.

"We will also observe the impact of relaxing the stock-holding norms on retail prices of sugar while considering more exports," he added.

Sugar production in India, the world's second largest producer after Brazil, is estimated to rise to 24.2 million tonnes in the 2010-11 season, compared to 18.8 million tonnes last season.

As per the initial estimate, the industry has pegged the next year's sugar output at 26-26.5 million tonnes in anticipation of higher sugarcane acreage and yields.