Indian sugar stockpiles will fall to their lowest in over a decade next year as consumption outstrips supply, but will still be sufficient for the world's top sugar consumer, India's sugar millers said on Friday.

Drought in the past two years in India and in the world's second-largest sugar producer Thailand has shrivelled sugar cane and cut supply. International sugar futures reach a near four-year high in late June.

Indian output in the 2016-2017 crop year should fall to around 23.3 million tonnes, down from 25.1 million tonnes the year earlier due to the drought, said Indian Sugar Mills Association President Tarun Sawhney in an interview with Reuters in Bangkok on Friday.

With consumption at 26 million tonnes, India would draw down around 2.7 million tonnes from stocks to leave them at 4.3 million tonnes at the end of the 2016-2017 crop year, Sawhney said.That was around two months of consumption, the lowest since 2005, and a level lower than India had traditionally kept of at least 3 months to deal with any supply shocks.

Indian sugar prices have surged over 50 % since October and contributed to inflation, but Sawhney said there was no reason for a change in government policy to encourage sugar imports.

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