NEW DELHI, Oct 9 (Reuters) - A jump in sugar refining capacity in Asia and Africa is set to help India boost exports of the raw variety of the sweetener and reduce the world No. 2 producer's bulging stocks.

Capacity for turning raw sugar into the white variety in countries such as Sri Lanka, Iraq, Yemen, Egypt and Bahrain, is expected to almost double from current levels of 5.6 million tonnes annually in coming years, industry executives said.

India, which has exported only small quantities of sugar lately, could ship as much as 3 million tonnes in 2013/14, capitalizing on rising demand in the two regions.

"Significant refining capacities have come up and substantial capacity is being added in both Asia and Africa and that will, in a few years, lead to about 10 million tonnes of total refining capacity in that region," said Leonardo Bichara Rocha, an economist with the International Sugar Organization.

Rapid population growth, a rising middle class and migration to cities from rural areas mean more demand for ice creams, soft drinks and processed food, pushing up sugar consumption to 35-40 million tonnes a year in Asia and Africa, according to trade and industry officials.

When consumption is stagnating elsewhere, traders see an annual 2-3 percent rise in sugar demand in Asia and Africa.

As production from the cane crop has lagged demand growth in the region, refineries are springing up to fill the gap. The refineries import raws, or unrefined sugar, to process into whites at a refining cost of $60-$90 a tonne and charge a premium on the end-product.

Al Khaleej Sugar in Dubai and Savola Group in Saudi Arabia were the first to spot the opportunity and build refineries. Others are now following suit.

In India, sugar production has surged, with 2013/14 expected to be a fourth straight year of surplus output. India's stockpiles stand at more than 8 million tonnes.

Indian mills, on their part, plan to boost production of raws to meet rising demand from the regional refineries.

"Companies would focus more on raws to cater to demand overseas," said Sanjay Taparia, chief financial officer of Simbhaoli Sugars.

More production of raws for exports would mean a lower output of whites, which would help cut India's stockpiles.

Also aiding exports from Indian mills will be a turnaround in New York raw sugar futures and a drop in refining margins, making it more lucrative to export raw sugar.

White-over-raws premiums fell to between $85 and $88 a tonne from $121 in August. Meanwhile, New York front-month contract has rebounded 16 percent since falling to a three-year low of 15.93 U.S. cents a pound in mid-July, partly on hopes the market could absorb a global surplus.

Indian shipments will have the benefit of geographical proximity to the refineries compared to competitors such as Brazil, the world's top sugar producer and exporter.

"You have got $10-$15 (per tonne) freight advantage than Brazil," said Nick Kwolek, regional manager of Sucden Middle East in Dubai.

Still, India would face stiff competition from Thailand, the world's second-largest sugar exporter, where availability of the sweetener for shipments is expected to jump after the crushing season starts in mid-November.

"The fourth quarter and the early first quarter of next year will be very important for India, before Thai producers have raw sugar volume to export. That will be a window the Indian producers will be able to exploit," said Tom McNeill, director at Brisbane-based commodities analyst Green Pool.