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Informist, Thursday, Mar. 5, 2026

 

By Taniva Singha Roy

 

MUMBAI – India's sugar exports in the 2025-26 (Oct-Sept) sugar season are expected to be affected significantly, as shipments to Afghanistan and a few West Asian countries have been stalled amid already subdued overseas demand due to uncompetitive prices, market participants said. However, this is likely to ease domestic supply-side pressure, which intensified after lower than expected sugar production, they added.

 

Following the attack on Iran by the US and Israel, India's exports of sugar, along with those of several other commodities, to West Asia have come to a halt. Exports to Afghanistan and certain West Asian nations were averaging around 60,000–70,000 tonnes a month, and shipments were projected to reach nearly 500,000 tonnes by September, which is 20% of the total export quota, said G.K. Sood, chairman of MEIR Commodities. However, these exports have been disrupted due to the ongoing geopolitical tensions. Saudi Arabia, Dubai and Iraq are among India's key export markets in West Asia.

 

A sugar export quota is a government-imposed restriction on the maximum quantity of sugar that can be exported during a specific, usually annual, period.

 

"Exports to Afghanistan is lost as they used to reach the destination via Iran or Pakistan. And the Pakistan route was closed during Operation Sindoor carried out by the government. So, the only route via which India exported to Afghanistan was through Iran," Sood said. Iran has now shut the Strait of Hormuz, a narrow waterway that connects the Persian Gulf to the Indian Ocean and is used to transport major commodities such as crude oil and sugar. India exports sugar to Afghanistan by routing shipments through Iran's Bandar Abbas port, located on the Strait of Hormuz.

 

The stopping of exports to West Asia and neighbouring countries comes at a time when the country's sugar exports are already low due to higher Indian prices, market participants said. "Indian sugar is currently less competitive in the global market as it is priced $20–$25 per tonne higher than global benchmarks like London futures," said V.K. Jain, former executive director at Deccan Group of Sugar. The benchmark sugar contract on the Intercontinental Exchange was at 13.73 cents per pound at the time of writing this report. In 2025-26 (Oct-Sept), Indian sugar mills exported 201,547 tonnes of sugar as of Jan. 31, the All India Sugar Trade Association said.

 

The government had earlier allowed the export of 1.5 million tonnes of sugar in the season ending September. Subsequently, on Feb. 13, it allowed the export of an additional 500,000 tonnes sugar to help manage surplus sugar availability in the country. However, exports of sugar seem highly unlikely at the moment, traders said.

 

Meanwhile, exporters are disinterested in exporting to other countries apart from Afghanistan because of high ocean freight rates. "If exports are happening at the cost, insurance, and freight basis, the exporters pay for the freight. And the cost, insurance, and freight rates from Jawaharlal Nehru Port which were at $150-$250 per tonne have jumped to $650-$700 per tonne since the West Asian crisis developed. This is why exporters are finding it more feasible to sell stocks in the domestic market rather than selling overseas," Jain said.

 

DOMESTIC PRICES

Prices of sugar in the domestic market are likely to be range-bound as supply-side pressure is expected to ease due to the halt in exports, according to traders. As sugar production is lower than estimated earlier, supply could have been strained towards the end of the current season, but escalating hostilities in West Asia could help stabilise domestic sugar availability this season, according to market participants.

 

The net sugar output in India in 2025-26 is estimated at 29.3 million tonnes, down from the earlier estimate of 30.95 million tonnes, the Indian Sugar & Bio-Energy Manufacturers Association said. Some analysts peg the sugar output even lower. Sood said sugar output would be somewhere around 28 million tonnes.

 

Expectations of a bumper sugar crop in India in 2025-26 have now turned into supply concerns due to significantly lower than expected sugarcane yields caused by excess rain and shorter harvest windows as mills processed the entire available crop in a shorter, more intense timeframe of 100 days instead of 150 due to higher processing capacities.

 

Domestic consumption during the ongoing season is expected to be around 28.5 million tonnes. "With a halt in sugar exports, the shortfall in availability of the sweetener in case of a lower output can be dealt with," Naresh Gupta, a trader from north India, said. Prices will largely remain at current levels and there could also be slight downtrend but only when demand is sluggish, he said.

 

Currently, sugar prices in the key markets of Uttar Pradesh are in the range of INR 3,810-INR 4,070 per 100 kg, lower than INR 3,830-INR 4,100 per 100 kg a month ago.

 

Although the expected output is sufficient to meet the gap in domestic demand for the current season, the industry will have to keep sufficient buffer stocks to ensure stable supply before the peak, new-season production arrives in full force in January, traders said.

 

"Hence, the quantity that was supposed to be exported will not fully be used to meet the domestic consumption but also kept aside as buffer stock for next sugar season," Jain said. ISMA estimates closing stocks in 2025-26 at 5.3 million tonnes, up from 5 million tonnes last year.  End

 

US$1 = INR 91.54

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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