India must double its sugar exports due to a surplus that is growing as a result of lower ethanol production
Industry officials stated on Thursday that India should double its sugar allocation for export to 2 million metric tonnes in the new season. This is because a lower sugar diversion rate to ethanol production will result in a greater domestic surplus.
Sugar futures in New York and London could be impacted by higher exports from the second largest sugar producer in the world. These futures are currently at five-year lows.
India ranked second in sugar exports worldwide for the five years up to 2022/23. Shipments averaged 6.8 million tonnes per year. A drought forced the government to ban exports of sugar in 2023/24. Only 1 million tons were allowed last year.
Deepak Ballani is the director general of Indian Sugar & Bio-Energy Manufacturers Association.
ISMA estimates that India's net sugar production for the season 2025/26, which began Oct. 1, will be 30.95 millions tons, after diverting approximately 3.4 million tonnes for ethanol. This is an increase of 18.5% over last year.
Industry had expected to divert 4.5-5 million tons of sugar to ethanol in this year. However, only 28% went to sugar based ethanol. The remainder was allocated to feed based ethanol plants.
INDUSTRY WANTS TO START EXPORTS PRIOR TO BRAZIL'S NEW SEASON
Prakash Naiknavare is the managing director of National Federation of Cooperative Sugar Factories.
India has a window of almost three months before Brazilian supplies for the new season begin and impact global prices.
Ballani said that although domestic sugar prices are higher than global rates at the moment, Indian mills anticipate export parity in early December, as local markets begin to be pressured by new-season supplies.
Ballani stated that "Sugar Mills will suffer losses due to the large amount of ethanol capacity not being used as many mills increased capacity after the government's push to blend 20% ethanol in petrol." They will also have to produce additional sugar. (Reporting by Mayank Bhardwaj and Rajendra Jadhav; Editing by Alexandra Hudson)
(source: Reuters)