India permits 1.5 million tons of sugar exports due to higher domestic surplus

India has allowed 1.5 million metric tonnes of sugar to be exported in the new season. The government announced this in a Friday notification, as it is expected that a decrease in sugar being diverted for ethanol 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.

Exports are expected to reduce sugar stock in the country, and help support local prices. Producers such as Balrampur Chini Mills and EID Parry will benefit from this.

The government announced in a notification that a 1.5 million ton export limit has been divided among sugar mills operating on a pro rata basis based on the average sugar production of the past three seasons.

Export of all grades of sugar is permitted.

India was the second largest sugar exporter worldwide in the five-year period from 2022/23 to 2022/23. Shipments averaged 6.8 million tonnes per year. A drought forced the government to ban exports of sugar in 2023/24. Last year, only 1 million tonnes were allowed to be shipped abroad.

According to the Indian Sugar & Bio-Energy Manufacturers Association, India's net output of sugar for the season 2025/26 that began on October 1 was estimated at 30,95 million tons, after diverting approximately 3.4 million tonnes for ethanol production. This is an increase of 18.5% over last year.

ISMA demanded last week that New Delhi permit the export of 2,000,000 tons of sugar for the new season.

Industry had expected to divert 4.5 to 5 million tons of sugar to ethanol in this year. However, only 28% went to sugar-based plants, and the rest to feed-based ethanol.

The notification stated that sugar mills may export their quota directly, or via merchant exporters or refineries until 30 September 2026.

The government will then reallocate any unused export quotas among other mills.

The government of India has also announced that it will remove its 50% duty on molasses exports. (Reporting and editing by Rajendra Jadhav, Nishit Navigationn; Editing and proofreading by Anil d'Silva. Editing and proofreading by Anil d'Silva.

(source: Reuters)