Why were India's sugar exports not so sweet this year?
The Centre allowed sugar exports totalling 1 million tonnes for the 2024-25 season (October-September). However, their shipments fell short of the allotted quota. What went wrong?
In January, the central government allowed sugar exports totalling 1 million tonnes for the 2024-25 season (October-September). However, their shipments fell short of the allotted quota. What went wrong? Mint explains.
Why did the mills fail to use up their quota?
Sugar mills prioritized local sales over exports. When the quota was announced in January, the global white sugar price was over $500 a tonne (about ₹44,360 per tonne). On the other hand, domestic ex-mill prices were lower. But over the last two months, domestic sugar prices have been higher than global market. In the final months of the season, global prices fell to $450-475 a tonne, reducing net export realizations to about ₹36,600 a tonne after freight. Meanwhile, domestic ex-mill prices stayed higher at ₹39,000-39,600 a tonne, encouraging mills to sell locally, rather than export.
How were listed sugar companies impacted?
Shares of leading sugar producers—EID Parry, Bajaj Hindusthan, Balrampur Chini, DCM Shriram, and Triveni Engineering & Industries—did better in the 2023-24 sugar season when exports were banned, compared to 2024-25 season, when the export market was opened up. The earnings outlook for companies now depends mainly on stable domestic prices, ethanol blending quantities and prices, and cane recovery, according to Crisil ratings. “If ethanol price increases, then it would give leeway to sugar mills," Prashant Biyani, vice president (Institutional Equity) at Elara Capital, said.
To which countries does India export white sugar?
India, the world’s second-largest sugar producer after Brazil, exports white sugar to several countries, including Somalia, Afghanistan, Sri Lanka, the UAE, Libya and Tanzania. These countries buy Indian sugar on competitive prices and reliable supply. Exports are influenced by global prices, domestic production levels and government policies such as export quotas.
What is the 2025-26 production projection?
Industry body Isma estimates that the country’s sugar production in the 2025-26 season would reach 34.9 million tonnes, 18% more than last year. Crisil Ratings sees India’s gross sugar output likely up around 15% during the season to about 35 million tonnes, aided by an above-average monsoon boosting cane acreage and yields in key sugar-producing states Maharashtra and Karnataka. This may potentially ease domestic supplies, boost diversion for ethanol and revive exports.
What are producers demanding?
In short, a timely export policy from the government. Considering that production is expected to jump 18% this year, India would have a comfortable buffer to meet domestic demand and ethanol requirements. Millers are of the view that they are in a position to export up to 2 million tonnes without affecting market stability. They say a timely export policy, by December, will help them manage inventories, cut holding costs and stay competitive globally, making the surplus output a strategic advantage.
topics
