India is expected to double its sugar export quota to 2 million metric tonnes for the 2025-26 season. The move comes as less sugar is being diverted for ethanol production, leaving a larger domestic surplus. Industry officials believe this could impact global sugar markets, where prices are already near five-year lows.

The country, which ranks as the world’s second-largest sugar producer, had maintained strong exports in previous years. Between 2018-19 and 2022-23, India averaged around 6.8 million tonnes in annual shipments. However, exports dropped to just 1 million tonnes in 2023-24 due to drought conditions that forced the government to impose restrictions.

According to Deepak Ballani, Director General of the Indian Sugar & Bio-Energy Manufacturers Association (ISMA), exports this season could reach up to 2 million tonnes. He added that higher sugar output and lower ethanol diversion will support these numbers.

Production Rise and Ethanol Shift

ISMA data shows India’s net sugar output for the 2025-26 season, which began on October 1, is expected to reach 30.95 million tonnes. This represents an 18.5% increase from last year. Around 3.4 million tonnes of sugar will be converted for ethanol production, far less than the 4.5-5 million tonnes formerly projected.

Only 28% of ethanol production is now coming from sugar-based feedstock, with most derived from grains and other materials. This shift is leaving many sugar mills with unutilized ethanol capacity. “Mills are facing losses due to underused ethanol plants and will have to produce more sugar,” Ballani noted.

Industry Calls for Timely Export Approval

The sugar industry has insisted that the government approve exports early in the season. Officials from the National Federation of Cooperative Sugar Factories (NFCSF) say this would permit India to capitalize on a three-month window before Brazil’s new crop floods the global market.

At present, domestic sugar prices are higher than international rates, but mills expect parity by early December as fresh supplies hit the market. Timely export clearance, industry experts say, would help balance local demand, ease inventory pressure, and ensure steady cash flow for farmers during the crushing season.

India’s potential export expansion could alleviate the domestic market while influencing global sugar prices. The industry awaits swift government action to capitalize on the short export window and maintain economic stability.