India’s Sugar Export Challenges Amid Low Global Prices

Mumbai – India’s sugar industry is facing a difficult export season as mills hesitate to participate in the global market. With international sugar prices positioned below domestic rates, millers are reluctant to finalize new deals that would offer limited financial benefit.

The government recently permitted a 1.5-million-metric-ton export quota for the ongoing season starting October 1. This decision followed expectations of a larger domestic surplus due to a reduced diversion of sugar toward ethanol blending programs.

However, trade officials say mills are unlikely to utilize the entire quota. The current price gap between global and domestic markets has created a situation where exporting offers no commercial incentive.

Industry participants note that Indian sugar currently trades at around $450 per ton on an FOB basis. This rate is approximately $25 per ton higher than benchmark futures, making Indian supplies less competitive overseas.

Only small volumes—about 10,000 tons—have been contracted so far, primarily for Afghanistan and select East African markets. Dealers say buyers are opting for higher-quality sugar elsewhere because it is more affordable in the current global environment.

Still, India is expected to become a key supplier again in early 2026 when production from Brazil, the world’s largest sugar producer, temporarily declines.

Brazil’s crushing season typically ends in November, creating a window in the first quarter where global buyers rely more heavily on Asian suppliers.

Demand from Asian and African countries is projected to rise sharply in January and February. These regions see increased consumption ahead of the fasting month of Ramadan, when communal meals and food preparation require additional sugar.

Traders say the seasonal surge may help support new shipments, but not enough to meet the full export limit. Unless global prices rise closer to India’s domestic levels, mills may continue holding back on major export commitments.

Market observers believe total exports for the season may reach around 800,000 tons. This mirrors the previous year, when only 775,000 tons were shipped against an approved quota of 1 million tons.

A reduced export volume from India—currently the world’s second-largest sugar producer—may influence the international market. Lower supplies from a major producer could help stabilize or lift global price levels over the coming months.

For now, millers remain cautious, closely watching developments in domestic pricing and international demand trends. The industry’s decisions over the next few weeks will determine how much of the approved quota is ultimately utilized.

If global prices strengthen, more mills may re-enter the export market. But if the price disparity persists, India may again fall short of its allotted export target for the second consecutive season.

The coming months will be significant for both domestic producers and international buyers. Seasonal demand, regional supply shifts, and price movements will shape the final export outcome for India’s sugar sector.