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Informist, Wednesday, Dec. 17, 2025

 

By Afra Abubacker and Pallavi Singhal

 

NEW DELHI – India's sugar exports in the 2025-26 season (Oct-Sept) is expected to gain momentum in the months ahead, supported by ample domestic availability, said Ravi Gupta, executive director at Shree Renuka Sugars Ltd. While most export volumes are currently at the contract stage and yet to be shipped, Gupta said shipments are likely to pick up from January as mills start executing the recently signed deals and the government reviews export quota utilisation by March.

 

"As far as execution is concerned, exports have only just begun because most of these contracts are only 10-15 days old," Gupta told Informist in an interview on the sidelines of the second Millet Maize DDGS (Distillers Dried Grains Solubles) Ethanol conference. He added that mills are likely to utilise most of the export quota, and if at all there is any shortfall, it would be limited to 100,000-200,000 tonnes.

 

In November, the government opened sugar exports for 2025-26, allowing mills to ship a maximum of 1.5 million tonnes by September. In 2024-25, the government permitted exports of 1.0 million tonnes, of which mills shipped some 800,000 tonnes.

 

For the ongoing 2025-26 sugar season, India's gross sugar production is projected to rise 16% on year to 34.35 million tonnes, according to the Indian Sugar and Bio-energy Manufacturers' Association. Mills are estimated to divert 3.4–3.9 million tonnes of sucrose or sugar for ethanol production, leaving the country with surplus stocks that need to be managed through exports. India needs 28.5 million tonnes of sugar for domestic consumption.

 

On biofuels, Gupta highlighted the need for government incentives to encourage the adoption of flex-fuel vehicles and pointed out the environmental and health benefits of higher ethanol blends.  

 

Below are the edited excerpts from the interview:

 

Q. In November, the government announced an export quota of 1.5 million tonnes for 2025–26 (Oct–Sept). How have sugar exports progressed so far? How much sugar has been contracted for exports, and how much has actually been shipped out? What is the industry's expectation for the full season?

 

A. Around 180,000–200,000 tonnes of sugar exports have been contracted so far. Also, some Uttar Pradesh mills have sold export quota to Maharashtra mills, coming close to 50,000 tonnes. Part of this is already included in the contracted volume. So, contracted exports and traded quota come to around 230,000 tonnes.

 

The government proactively announced the export policy at the right time before the crushing season started. This allowed mills to plan and participate in exports. Mills, particularly in Maharashtra and Karnataka, have taken advantage of global prices and contracted exports at around $440–$450 per tonne. As far as execution is concerned, exports have only just begun because most contracts are 10–15 days old, and shipments are now expected to pick up.

 

India's sugar exports in 2025-26 will depend on timing and international sugar prices. With the 1.5-million-tonne quota already granted by the government and sufficient sugar availability in the country, there is no reason why the industry will not take advantage of the export quota.

 

Q. At current prices, do you expect the full 1.5-million-tonne quota to be exhausted?

 

A. That will depend on how many mills come forward to sell. Spot demand is not close to 1.5 million tonnes at present, so exports will be gradual. However, over the course of the year, exporting around 1.5 million tonnes is quite possible and the quota should largely be exhausted.

 

The government will review how mills have utilised their export by Mar. 31, and any unused quota will be reallocated to those mills interested in exporting. Export momentum should, therefore, pick up in Jan-Mar. Soft domestic sugar prices and a depreciating rupee are also supporting exports.

 

Q. Some industry voices have raised concerns that exports may fall short of the quota this year as well, and actual shipments may only reach 600,000–700,000 tonnes. How do you view this projection?

 

A. I am not sure where the 600,000 tonnes figure comes from. Some mills may not actually undertake exports but the unused quota will be reallocated. Ultimately, exports are necessary to manage the supply-demand balance and I do not see a situation where exports stop at 600,000 tonnes simply because some mills don't want to export.

 

That said, in a large quota like 1.5 million tonnes, a shortfall of 100,000–200,000 tonnes is possible. But by and large, exports should take place. In an excess supply situation, markets tend to find buyers at reasonable prices.

 

Q. How challenging is the 2025–26 sugar year for the industry amid rising sugarcane costs and forecasts of higher domestic and global sugar production?

 

A. Sugar is a highly regulated industry, so both challenges and solutions largely depend on the government policy. The export quota of 1.5 million tonnes will largely help manage surplus and balance supply and demand.

 

Another key issue is higher sugarcane costs. Mills cannot sell sugar at low prices while paying higher cane prices, which is why the industry has been seeking an increase in the minimum selling price of sugar. Ethanol prices have been stagnant for the past three years and need reassessment based on production costs. If these issues are addressed, the sector can remain sustainable, even if profitability may not be very high.

 

Q. Ethanol supply allocations for 2025–26 have disappointed both sugar and grain-based producers. What are the expectations from the upcoming tenders?

 

A. Around 3.5 million tonnes of sugar diversion for ethanol has already taken place and most demand from oil marketing companies has been met under the first tender. There may still be scope to increase sugar diversion by another 300,000–500,000 tonnes. Even after this additional diversion, the industry will have sufficient surplus sugar to export 1.5 million tonnes.

 

Q. There is an uncertainty around higher ethanol blends beyond E20 amid concern over fuel efficiency and vehicle compatibility. Although the government has formed an inter-ministerial committee to study the viability of higher blends and chart a roadmap for it, there are no clear updates so far. How is the industry viewing this lack of clarity?

 

A. Let's face the reality. At 20% blend, ethanol demand is around 11 billion litres, while installed capacity is close to 19 billion litres. We also have surplus feedstock material such as maize, rice, and sugar, so supply conditions are favourable for higher blending.

 

Now, there are also additional opportunities coming up with the possibility of ethanol blending in diesel. Diesel consumption is much higher than petrol, so even if blending is limited to 1-3%, it will create significant demand. All these are part of the broader transition to clean energy.

 

Q. The industry has been promoting flex-fuel vehicles for higher ethanol consumption and green mobility but there are no clear incentives yet for consumer adoption. How should the policy evolve?

 

A. Policies have to have a long-term view for promoting green mobility. Given surplus ethanol availability, flex-fuel vehicles are the right strategy for India. Flex-fuel vehicles also allow the switching between petrol and ethanol depending on supply. We have the technology for flex-fuel vehicles.

 

But the government has to incentivise flex-fuel vehicles to make it viable. A cut in GST for flex-fuel vehicles, on a par with electric vehicles would be an important incentive. States can also reduce registration charges and road taxes. 

 

Q. What about differential pricing for higher blended fuel against other base fuels? 

 

A. Since 100% ethanol has a lower calorific value, it must be priced cheaper than petrol. This is well understood. However, fuel pricing can be easily sorted out when consumers start to buy flex-fuel vehicles.

 

Incentives should initially focus on vehicle adoption. It is also important to recognise that green energy should not be compared with carbon energy on direct economic cost. Air quality levels in cities, such as Delhi, highlight the long-term health and lifestyle costs of pollution. When environmental and health costs are accounted for, green energy is cheaper.  End

 

US$1 = INR 90.33

 

Edited by Akul Nishant Akhoury

 

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