India plans 1.5 mln ton sugar export quota on higher domestic surplus
India will allow 1.5 million metric ton sugar exports in the upcoming season as the government and trading sources said on Monday. This is because a decrease in sugar diversion for ethanol production should leave 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 stockpiles in the country, which will support local prices. Producers such as Balrampur Chini Mills and EID Parry and Dalmia Bharat, who saw their shares rise up to 5% on Monday morning, stand to benefit.
A government source, who declined to be named before the final order was issued, said: "We have decided to allow sugar to be exported this year. We are considering surplus stocks and farmers’ interests."
A government official who declined to be identified because he wasn't authorized to speak with the media said that the government will likely allow sugar exports in the season 2025/26, which began October 1. The final order is expected to come soon.
The Ministry of Consumer Affairs, Food and Public Distribution didn't immediately respond to an 'ask for comment.
India was the second largest sugar exporter worldwide in the five-year period from 2022/23 to 2023/24, with an average of 6.8 million tonnes shipped annually. 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 2025/26 is estimated at 30,95 million tons, after diverting approximately 3.4 million tonnes for ethanol production. This represents 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 plants.
A Mumbai-based dealer at a global trading house said that exporting 1.5 million tonnes could be difficult for Indian industry because local prices are higher than global levels.
He said that a few mills in Maharashtra could begin to produce raw sugar, which they would sell to refineries in Asia or Dubai.
The official from the Indian government said that India also plans to remove the 50% duty it currently charges on the exportation of molasses. Reporting by Mayank Jadhav and Rajendra Jhadhav; editing by Mrigank Dahniwala, Kate Mayberry
(source: Reuters)
