Sugar output would drop by 530,000 tonnes to 1.7 million tonnes in Yunnan, China's second largest sugar producing area, said Deng Yi, president of the provincial sugar industry association.

The forecasted slump had pushed sugar prices to 5,200 yuan (761.8 U.S. dollars) per tonne, the highest in years, Jia said.

The rocketing prices would lead to excessive fluctuations in cane and sugar production, which was harmful to the long-term sustainable development of the industry, said Nong Guang, president of Guangxi's sugar industry association.

China's sugar production would drop by nearly 10 percent as the severest drought in a century continued to devastate sugar cane croplands in the country's south, industry associations said Tuesday.

China's sugar production this season would see a year on year drop of one million tonnes to 11 million tonnes, three million tonnes short of the country's overall demand, said Jia Zhiren, president of the China Sugar Association.

The worst-hit Guangxi Zhuang Autonomous Region and Yunnan Province are the country's top two sugar producing areas.

In Guangxi, which accounts for 60 percent of China's sugar output, drought had forced plants to halt production due to lack of sugar cane, said Zhong Jian, head of Guangxi agricultural department's sugar production office.

Drought had cut Guangxi's sugar cane output by about 1.1 million tonnes for this season. And the region's sugar output was expected to fall by at least 400,000 to 500,000 tonnes, Zhong said.