Decline in Sugar Exports Due to Rising Domestic Consumption

25-May-2026 05:55 PM

New Delhi: Demand and consumption of sugar within the domestic sector are steadily increasing, and the Central Government is prioritizing measures to ensure smooth supply and availability, as well as to curb any sharp rise in prices. Increasing ethanol production ranks second on this list of priorities, while sugar exports have been placed in the third—or final—position.

From the 2019-20 marketing season through 2022-23, the outlook for sugar exports was robust; at one point, shipments even surged to an all-time high of 11 million tonnes. However, production conditions subsequently became uncertain, which began to impact export volumes.

The situation in the current 2025-26 marketing season is no different. Sugar exports have been moved from the 'Free' list to the 'Restricted' list, meaning that exporters cannot enter into contracts or ship sugar without obtaining prior permission from the government. Furthermore, the government determines the sugar export quota only after a thorough study and analysis of all relevant aspects.

For the current 2025-26 marketing season (October–September), the government formally announced—in two phases—that it would permit the export of 2 million tonnes of sugar, and a quota of approximately 1.59 million tonnes has already been allocated.

However, as indications emerged that the impact of the El Niño weather cycle could lead to a decline in sugarcane and sugar production during the 2026-27 season, the government imposed an immediate ban on sugar exports. In fact, sugar production within the country during the 2025-26 season fell significantly short of expectations—a volume that is even lower than the total projected domestic demand and requirement.

Consequently, the industry is expected to be left with only a limited carry-over stock of sugar at the end of the current marketing season. Given this scenario, the government is unwilling to take any additional risks.