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Informist, Monday, Apr. 6, 2026

 

Afra Abubacker

 

NEW DELHI – Indian exporters have signed deals to export 600,000 tonnes sugar so far in 2025-26 (Oct-Sep), of which they have shipped about 400,000 tonnes, according to market participants. Exports gathered momentum in March as parity improved amid a weak rupee and an increase in prices of the commodity globally, they added. 

 

"If the pace continues, India is expected to export 1.2 million tonnes of sugar by September end," G.K. Sood, chairman, MEIR Commodities, said. Sugar refineries in West Asia have been affected by war, and the closure of the Strait of Hormuz has disrupted the global supply of refined sugar, he added. 

 

For 2025-26 (Oct-Sep), the government has permitted mills to export 1.58 million tonnes of sugar, of which 373,000 tonnes have already been shipped, Anupam Mishra, additional secretary, Ministry of Consumer Affairs, said in an inter-ministerial briefing on developments related to the West Asia war on Monday. 

 

The Arabian Peninsula serves as a gateway for global sugar trade, importing approximately 10% of the world's raw sugar through the Strait of Hormuz annually and exporting around 5% of global refined sugar via the same route, S&P Global reported, quoting sugar consultant Michael McDougall.

 

In March, white sugar August futures contract on Intercontinental Exchange rallied to an over-five-month high of $468.70 per tonne, tracking the surge in crude oil prices. "Crude is leading, and the rally in sugar price has supported the Indian export market," Shashikant Pandhare, analyst, Narotam Sekhsaria Family Office, said. 

 

Higher crude oil prices encourage sugar mills to divert more sugarcane for producing ethanol, which decreases the availability of sugar for consumption. Ethanol is used as a biofuel to blend with petrol. 

 

The Indian rupee weakened sharply in March, falling to a record low of 95.22 on Mar. 30, improving export competitiveness. The Indian unit plunged amid surging crude oil prices and strong outflows by foreign portfolio investors from the domestic markets after Israel and the US launched joint military strikes on Iran at the end of February.

 

Meanwhile, Brazil's leading sugar consultancy Safras & Mercado expects mills to divert more sugarcane for ethanol production than that in 2026-27 sugar season that started April. The trading house has estimated sugar production to decline to 40.33 million tonnes in 2026-27 from 43.5 million tonnes last year, according to media reports. 

 

However, Sood only sees slim chances of such diversions materialising, as fuel prices have been largely stable in Brazil. "Brazil's gasoline prices are state-controlled. And if they don't increase prices, there is no incentive to produce more ethanol", Sood said, adding that the sugar produced in the 2025-26 season remains available for exports. 

 

According to Pandhare, the rally in sugar prices is not strongly supported by fundamentals. "There is a perception of lower sugar supply due to supply chain disruptions and higher crude oil prices," he said, adding that the world is sitting on surplus sugar. 

 

The International Sugar Organization has forecast a surplus of 1.22 million tonnes in 2025-26 season ending September due to higher sugar production in India, Thailand, and Pakistan. India is the second-largest sugar exporter, after Brazil. 

 

At the time of writing this report, the white sugar August futures contract on ICE London was trading 1.5% down at $439 per tonne, tracking the losses in crude oil as a ceasefire proposal between the US and Iran eased supply concerns. Increased sugar production in major exporters such as India also weighed on prices. 

 

India's sugar production as of March end was up 9% on year at 27.12 million tonnes in 2025-26 (Oct-Sep), according to the National Federation of Cooperative Sugar Factories Ltd. Sugar production has risen from last year due to higher sugarcane crushing and improvements in the recovery rate. 

 

India is shipping sugar to Srilanka at the cost, insurance, and freight of $460 per tonne, Pandhare said. India majorly exports sugar to Srilanka, Bangladesh, Nepal, Afghanistan, and the UAE, among others.  End 

 

US$1 = INR 93.06

 

Edited by Deepshikha Bhardwaj

 

 

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