Indian sugar exports turn bitter for importers as domestic prices surge

Two weeks since India allowed export of one million tonnes (mt) of sugar, only a negligible quantity has been shipped out of the country so far. This is in view of sugar mills seeking higher prices in view of an increase in domestic prices.

“The trading (export) has been slow as mills are expecting higher prices. Domestic prices are rising as latest estimates by various associations have pegged sugar production lower,” said Dilip Patil, Managing Director of Samarth  SKK Ltd and chairperson of Sugar Bioenergy Forum.

Though not many export transactions have taken place, many mills have sold their export license at prices over ₹44,000 ($505) a tonne. 

Indian quotes

Some 3 lakh tonnes of sugar has been traded for exports with 2.3 lakh tonnes by Uttar Pradesh mills. “Mills in Maharashtra, Karnataka and other States have traded 70,000 tonnes,” said Rahil Shaikh, Managing Director, MEIR Commodities (India). 

“Domestic prices have currently increased to ₹41,000 a tonne. So mills are looking at prices above ₹45,000 to export,” said Patil.

On Tuesday, white sugar in London was quoted at $519.90 a tonne for March delivery. Raw sugar on Intercontinental Exchange (ICE), New York,  was quoted at 19.27 cents a pound (₹37,345 a tonne)

“Indian traders are quoting $530 a tonne, which is expensive in the global market,” said Shaikh, adding that some 1.5 lakh tonnes have been shipped to Bangladesh, Nepal, Tanzania, Sri Lanka and Dubai. 

Output estimates

There are quite a few different estimates on sugar production. The Indian Sugar and Bio Energy Manufacturers (ISMA) has estimated production this season to September at 27.27 million tonnes, while the All-India Sugar Traders Association has pegged it at 26.52 million tonnes. 

The National Federation of Cooperative Sugar Factories has forecast production at 27.10 mt. The production estimates are net after taking into consideration the four mt diversion for ethanol. Shaikh’s MEIR Commodities estimates the net production at 28.10 mt. It has also forecast consumption higher than others at 29.5 mt. 

According to government estimates, sugar production in the current season, which started on October 1, is estimated to be 32 mt, whereas the domestic consumption is seen to be 28.5-29 mt, with 4 mt diverted towards ethanol. After factoring in the carryover stock of 7.9 mt from the previous season, the closing stock at the end of September 2025 may be 6.9 mt.

In view of these estimates and the Government allowing exports, retail sugar prices in the domestic market have increased to nearly ₹45 a kg from ₹44 in mid-December, data from the Ministry of Consumer Affairs show. 

Downtrend

Globally, sugar prices are down on the dollar gaining strength and a favourable outlook for the 2025-26 crop. The other bearish prospect for sugar is the projection of a larger-than-expected production in Brazil. 

Rabobank has estimated Brazil’s Center-South’s 2024/2025 harvest as the third largest and could reach the second position, depending on the results until March 2025.

The Indian sugar trade expects prices to rise in the global market and its produce will find its way into importing nations. 

On January 20, the Indian government allowed exports of one mt of sugar for the current season on representation from the industry to permit the shipements to help mills pay dues to sugarcane farmers.