India Allows 1 Million Metric Tons of Sugar Exports as Supply Remains Sufficient
India has decided to allow sugar mills to export 1 million metric tons of sugar for the current season, dismissing speculation that falling output estimates would lead to export restrictions. This decision reassures market participants and stakeholders that there is sufficient supply to meet domestic consumption and ethanol production needs, despite earlier concerns about potential shortages.
As the world’s second-largest sugar producer, India had initially set an export allowance of 1 million metric tons for the 2024-25 season, running through September 2025. This decision was based on earlier assessments indicating a surplus available for overseas markets. However, since then, industry groups have revised their production estimates downward, raising fears of possible restrictions on exports. Despite this, government sources have confirmed that the country has ample stocks to fulfill domestic demand while still allowing for the permitted exports.
India’s sugar mills are projected to produce approximately 26.4 million metric tons of sugar this year, while domestic demand is estimated at 28 million metric tons. While this suggests a shortfall, the industry began the season on October 1, 2024, with a robust carryover stock of 8 million metric tons. Even after exporting 1 million metric tons, India is expected to end the season on October 1, 2025, with carryover stocks of 5.4 million metric tons, ensuring more than two months’ worth of domestic demand. This confirms that India’s sugar supply remains stable despite fluctuating output projections.
Sugar mills in India commence crushing cane in October, with production accelerating by late November, further boosting local supplies. Last year’s strong production led to domestic sugar prices falling below production costs, causing financial strain on mills and delays in payments to cane growers. Given sugar’s political sensitivity and its deep economic impact, the government closely regulates its trade, including setting cane prices that mills must pay to farmers and controlling the quantity mills can sell in the open market.
The government allocated 2.3 million metric tons of sugar for mills to sell in March, but reports indicate that not all of it will be sold, reflecting an oversupply in the market. This reinforces the government’s confidence in allowing exports without concerns about domestic shortages. The sugar industry’s outlook remains stable, with next year’s production expected to surpass this year’s figures, further supporting the government’s decision to allow exports.
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