SINGAPORE, Aug 7 (Reuters) - Thailand, the world's second-largest sugar exporter after Brazil, will be forced to cut prices further to lure consumers as more than a third of the country's output of its recent record crop remains unsold, industry sources said on Thursday.

Thailand's supply overhang could cap global prices even as the market is expected to shift to being balanced in the coming 2014/15 crop year - after four straight years of surplus.

After harvesting a record 11 million tonnes in the just-ended 2013/14 season, Thailand faces fierce competition not only from rival Brazil but also from India. India was active in the export market earlier this year to cut stocks.

Thailand still has about 4.30 million tonnes - 1.80 million tonnes of raws and 2.50 million tonnes of whites - yet to be shipped as of the end of July, according to Brisbane-based commodities analyst firm Green Pool.

"There's a lot of sugar in the hands of mills and traders, and the combination of the two is making life very difficult for sellers," said Tom McNeill, director of Green Pool.

Although Thai raw sugar prices have returned to discounts for the first time in five years, and despite cheaper freight rates compared to Brazil, buyers such as Indonesia, China, Vietnam and the Middle East are biding their time.

Bulk freight rates for raw sugar from Thailand to Indonesia, the world's top raw sugar buyer, are $13 to $14 a tonne, much lower than $33 to $34 to ship the sweetener from Brazil.

The widely-traded high polarisation or hipol raws are being offered at 10 points below New York futures for spot delivery, while bids are as low as 70 points below futures.

Last August, hipol was quoted as high as 130 points or 1.3 U.S. cents a pound above futures.

Benchmark New York raw sugar futures tumbled to their weakest in nearly six months on Wednesday, reflecting an oversupplied market. Sugar futures lost about 16 percent in 2013.

"Thailand has to sell sugar at discounts because they are overstocked. I think between 800,000 and 1 million tonnes of sugar are stuck there currently," said a dealer in Jakarta.

"I don't think people will buy at 70 points below. If the discounts widen to 100 points, then people may think about it, but Indonesia is already well covered this year."

Some refiners in Indonesia have cancelled import deals for up to 400,000 tonnes of raws from Australia after Jakarta issued fewer import permits than expected this year.

Since refiners usually strike deals with suppliers a year before the government issues permits, they may chase Thai sugar for next-year deliveries if they are happy with the prices.

(Editing by Tom Hogue)