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Informist, Monday, Nov. 10, 2025

 

By Afra Abubacker

 

NEW DELHI – The sugar industry has welcomed the government's decision to allow sugar exports in 2025-26 (Oct-Sep), as it has been counting on the global market to sell the surplus sugar output expected this season. Although export viability remains in question, industry officials said mills now have the flexibility to time shipments over a longer trading window as global prices firm up.

 

The Centre has decided to allow mills to export 1.5 million tonnes of sugar by September, the Press Trust of India reported, citing a letter from Food Minister Pralhad Joshi to Karnataka Chief Minister Siddaramaiah. The government is also planning to remove 50% export duty on molasses, a by-product of sugar, according to the letter dated Nov. 7.

 

Both decisions will open additional markets for the Indian sugar industry, which is expecting strong sugar production this year, and could weigh on domestic prices. The government is yet to issue a notification on the same. 

Industry officials called the government's decision "timely" and "pragmatic", and hoped to get additional quotas in the coming months. The Indian Sugar & Bio-energy Manufacturers Association has urged the government to allow 2.0 million tonnes of sugar exports in 2025-26. In the 2024-25 sugar season, the government allowed exports of 1 million tonnes, of which only 800,000-900,000 tonnes were shipped. 

 

"When the season progresses, the government will be assured our surplus production is as mentioned (by ISMA)," ISMA Director General Deepak Ballani said. "Perhaps, after we complete 1.5 (million tonnes sugar exports), we can get some more," he added. 

 

As per ISMA's first advance estimates, India's sugar production is likely to increase 18.4% on year to 30.9 million tonnes in 2025-26. Last year, the country produced 26.1 million tonnes. The country needs around 28.5 million tonnes for domestic consumption. 

 

With a carry-over stock of about 5.0 million tonnes, total sugar availability in 2025-26 is projected at 35.9 million tonnes. After meeting domestic demand, ISMA had earlier estimated a closing stock of 7.4 million tonnes as on Sept. 30, 2026. With the government's decision, 1.5 million tonnes of surplus sugar will be exported, which is likely to support domestic sugar prices and improve cash flows for mills. 

 

The government has been mulling opening sugar exports amid lower-than-expected sugar diversion for ethanol production in 2025-26. Though the sugar industry offered to supply 4.7 billion litres of ethanol for blending with petrol, oil marketing companies have only placed orders for 2.89 billion litres from cane-based feedstocks. 

 

To deliver this volume, distillers would need to use less sugar than was previously expected. "The (sugar) balance sheet has now changed," a senior government official told Informist earlier. "We were expecting 4.5-5.0 million tonnes of sugar diversion (for ethanol production) this year, but now it is 3.4 million tonnes." 

 

India's gross sugar output, excluding the diversion for ethanol production, is projected at 34.4 million tonnes.

 

The market has cheered the government's decision. Shares of Balrampur Chini Mills, Uttam Sugar Mills, Sakthi Sugars, Bajaj Hindusthan Sugar, Shree Renuka Sugars, Dwarikesh Sugar Industries, and Dhampur Sugar Mills rose 1-7%.

 

Export opportunities

The sugar industry has been urging the government to allow exports and announce its export policy early this year. "We humbly request the government to permit the export of 2 million tonnes of sugar in 2025-26, with an early policy announcement, so that mills can contract forward, secure better prices, plan their production, and maintain market balance," ISMA President Gautham Goel had said at a conference in September. 

 

In the 2024-25 sugar season, the government announced a 1 million tonne export quota in January, but exporters shipped only 800,000-900,000 tonnes. Exports fell short of the quota as prices were unattractive to Indian exporters.

 

"Today, there is no parity. The global sugar market is around $410 per tonne, which is coming to around INR 34,000 a tonne (on cost, insurance, and freight basis for India). Currently, ex-mill prices in Maharashtra are around INR 38,000-INR 40,000 per tonne," Ballani said, asked if the current global sugar rates are remunerative.

 

However, industry experts say, global sugar prices may firm up in the coming months. "The sugar market is dynamic. We have seen prices move from $560 to $403 per tonne this year," G.K. Sood, chairman, MEIR Commodities, said. 

 

According to the industry, Indian sugar will achieve export parity if white sugar prices are around $450-$460 per tonne. Even at current global sugar prices, Sood said, India can export 400,000-500,000 tonnes of sugar to neighbouring countries such as Nepal, Bangladesh, and Sri Lanka, given freight advantages and shorter shipment durations. 

 

"Sri Lanka saves on freight by buying from India versus Brazil. From Brazil, it takes two months; from India, it takes only two weeks. Also, they have to buy large volumes from Brazil. From India, they can even buy just five containers," Sood said.

 

He also said Nepal offers significant opportunities for India, as it prefers Indian over Brazilian sugar. In addition, India can comfortably export sugar to many markets in West Asia and Africa. "India's competitors might perceive some risk in those markets," he added. 

 

MOLASSES

After the government imposed a 50% export duty on molasses in January 2024, India's molasses exports fell to nearly nil for nearly two years. Molasses, a thick-dark sugar syrup, is a by-product obtained during sugar extraction and is mainly used as a feedstock for ethanol production. 

 

The government had imposed an export duty on molasses to ensure sufficient molasses availability for ethanol production in 2023-24. The government had directed sugar mills and distilleries to "endeavour" to make ethanol from C-heavy molasses, but curbed the use of sugarcane juice and B-heavy molasses for biofuel production in 2023-24.

 

The policy came as part of government efforts to ensure sufficient sugar amid concerns about lower output. In 2023-24, the General Election year, gross sugar output was initially estimated to fall 9-12% on year. Amid concerns over sugar supply, the government banned ethanol production from key sugarcane feedstocks to check prices in a poll-bound year.

 

According to Sood, removing 50% export duty on molasses "restores a market" that had been lost for sugar mills without distillation capacities. He also noted that only a small volume of ethanol is produced from C-heavy molasses. "Globally, no one buys B-heavy molasses. Only C-heavy is traded, mostly used for animal feed and industrial alcohol," he added. 

 

India is estimated to produce about 10 million-13 million tonnes of molasses annually. India used to export 1.0-1.5 million tonnes of molasses to Thailand, the Netherlands, South Korea, and the UK. End 

 

US$1 = INR 88.69

 

Edited by Saji George Titus

 

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