News Capsule: Duty-Free Sugar Imports Could Raise Sept-Nov Supply by 15%, Cool Prices: India Ratings
22-Aug-2026 12:49 PM
News Capsule: Duty-Free Sugar Imports Could Raise Sept-Nov Supply by 15%, Cool Prices: India Ratings
★ India Ratings and Research expects the government’s decision to allow duty-free imports of 1 million tonnes of raw sugar to ease near-term supply tightness and moderate domestic sugar prices ahead of the festive season.
★ The imports, allowed under the Tariff Rate Quota (TRQ) until Oct. 31, could increase sugar availability by around 15% during September-November. Domestic sugar quota allocations during this period have averaged around 7 million tonnes over the past three to four years.
★ India Ratings said the imports would help replenish inventories closer to normative levels and improve availability during the peak consumption period. However, the measure is temporary and is unlikely to materially change the sector’s fundamentals during the current financial year.
★ Domestic sugar prices are expected to ease from record highs following the imports, but prices are likely to remain relatively firm due to tight inventories, higher sugarcane procurement costs and uncertainty over 2026-27 sugar production.
★ India’s sugar inventories are estimated at around 4.5 million tonnes at the end of the 2025-26 season on Sept. 30, below the normative level of around 5.5 million tonnes. The permitted imports are expected to bring opening stocks for the new season closer to normal levels.
★ India Ratings said the import window is likely to remain temporary and is unlikely to continue beyond the current measure. Going forward, government policy on diversion of sugar towards ethanol production will be a key factor determining domestic sugar availability in the 2026-27 season.