India’s sugar export plans are set to resume strongly in the 2025/26 season, with the government preparing to allow 1.5 million metric tons of sugar exports to ease domestic surplus, according to government and trade sources. The decision comes as a decline in sugar diversion for ethanol production is expected to leave higher stocks available for trade. The move is expected to support sugar producers and stabilize local prices while potentially increasing competition in global markets. Higher exports from the world’s second-largest sugar producer and first and the largest rice producer could influence global sugar prices, with benchmark New York and London futures already hovering near five-year lows. “We have agreed to allow sugar exports this year, keeping in mind surplus stocks and farmers’ interests,” said a government official familiar with the matter. The final order for allowing sugar exports is likely to be issued soon, covering the 2025/26 sugar season that began on October 1.
Sugar Export to Boost Indian Sugar Mills and Farmers
The sugar export allowance is expected to benefit key sugar manufacturing companies such as Balrampur Chini Mills, EID Parry, Dalmia Bharat, and Shree Renuka Sugars, whose shares surged up to 5% following the news. The policy also aims to help sugar mills clear dues to farmers and maintain healthy domestic price levels. According to the Indian Sugar & Bio-Energy Manufacturers Association (ISMA), India’s net sugar output for 2025/26 is estimated at 30.95 million tons after diverting 3.4 million tons for ethanol production — an 18.5% increase compared to last year.
ISMA recently urged the government to allow at least 2 million tons of sugar exports to manage growing inventories, emphasizing that lower ethanol diversion this year has increased available sugar stocks.
Ethanol Production and Policy Shift
Initially, ISMA expected 4.5–5 million tons of sugar to be diverted for ethanol. However, only 28% of the ethanol production allocation came from sugar-based feedstock, with the rest relying on grain-based ethanol plants. This reduced diversion created a high sugar forecast for the upcoming season, prompting policymakers to permit limited exports to balance the market. A Mumbai-based trade analyst noted that Maharashtra sugar mills may start producing raw sugar for refineries in Asia and Dubai, despite local prices currently being higher than global rates.
Molasses Export Duty May Be Removed
In a related move, the government is also considering removing the 50% export duty on molasses, which could further encourage trade and optimize sugar byproduct utilization. India’s decision to allow 1.5 million tons of sugar exports marks a significant shift in its trade strategy after last year’s export restrictions due to drought conditions. The renewed export opportunity is set to benefit farmers, sugar mills, and the broader Indian sugar industry, while reinforcing India’s position as a major player in global sugar trade.
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