India to approve 1.5M tons of sugar exports amid decline in ethanol diversion
The Indian government plans to permit sugar exports following a drop in ethanol production, creating a larger domestic surplus.
INDIA – India plans to permit the export of 1.5 million metric tons of sugar in the 2025/26 season, as lower diversion of sugar for ethanol production is expected to leave a larger domestic surplus, government and trade sources told Reuters.
The move comes after a year-long export ban imposed due to drought-related production challenges. India, the world’s second-largest sugar producer, was also the second-largest exporter in the five years to 2022/23, with annual shipments averaging 6.8 million tons. However, in 2023/24, exports were limited to only 1 million tons.
A government official said that the decision to allow exports was made considering the country’s sufficient stock levels and the interests of sugarcane farmers. Another government source confirmed that the final export order is expected soon.
Industry estimates show India’s net sugar output for the 2025/26 season will reach 30.95 million tons after diverting around 3.4 million tons for ethanol production. This represents an 18.5% increase from the previous year, according to the Indian Sugar & Bio-Energy Manufacturers Association (ISMA).
ISMA had earlier urged the government to approve at least 2 million tons of sugar exports in the new season. The association initially projected a diversion of 4.5 to 5 million tons for ethanol, but only 28% of the total allocation for biofuel production was directed to sugar-based ethanol, with the remainder going to feed-based ethanol plants.
While the planned exports are expected to ease domestic sugar stockpiles and support local prices, benefiting producers such as Balrampur Chini Mills, EID Parry, Dalmia Bharat, and Shree Renuka Sugars, analysts warned that high domestic prices could make exports challenging.
A Mumbai-based trader said some mills in Maharashtra might begin producing raw sugar for sale to refineries in Asia and Dubai.
Additionally, the government is considering removing the existing 50% export duty on molasses, according to an official familiar with the matter.
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