India lifted restrictions on sugar exports this year in January, allowing millers to ship one million tonnes during the 2024-25 season (October-September). This move is expected to benefit 5 crore farmer families, 5 lakh workers. Additionally, it will improve the liquidity of sugar mills, ensuring timely cane payments while maintaining price stability and adequate supply for consumers. India’s decision to allow sugar exports comes when stocks are expected to fall this season following crop problems. Earlier, India exported over 6 MT of sugar in the 2022-23 season and since then the government had not allocated any quota for sugar export.
Sugar plays a vital role in food processing, particularly in baking and food production. Common types of white sugar include granulated, caster, icing, and jam-setting sugar. With the rising global demand for sugar, countries like India and Brazil have emerged as leading suppliers of sugar. India is a major producer, consumer, and exporter of sugar and its related products.
As the world’s second-largest sugar exporter, India’s success is attributed to strong production standards and favourable agricultural policies. Additionally, increasing global sugar demand, especially in Southeast Asia and Africa, has further boosted India’s sugar exports. Among others, India exports sugar to Indonesia, Bangladesh and the United Arab Emirates.
Rising from US$ 1.97 billion in 2019, India’s sugar exports reached US$ 6.32 billion in 2022. Subsequently, due to concerns over a reduced harvest caused by erratic monsoon rainfall and the need to regulate domestic prices, India extended its sugar export ban, initially imposed in June 2022, beyond October 2023. Consequently, the sugar exports witnessed a decline in the year 2023.
Major export destinations in the year 2023 included Sudan (US$ 655.52 Million), Bangladesh (US$ 393.03 Million), Sri Lanka (US$ 322.46 Million), Somalia (US$ 233.74 Million), and Djibouti (US$ 229.27 Million).
For the 2023–24 marketing year (October–September), India had restricted sugar exports to stabilize retail prices and boost domestic supply. This decision aligned with the government’s efforts to maintain affordability for local consumers. However, exports to the US and the European Union remained exempt under the TRQ quotas and concessions issued in 2023. Despite the restrictions, India’s sugar exports reached nearly 3 million metric tons in the fiscal year 2024.
As of July 17, 2024, India leads the world in sugar exports with 69,781 shipments, followed by Ukraine with 157 shipments and China in third place with 147 shipments.
In January 2025, the government decided to allow exports of 1 million metric tons of sugar during the current season. This decision seeks to help sugar mills reduce their surplus stock, stabilize domestic prices, and supporting the sugar industry amid declining local rates.
“Export quotas of 1 MT have been pro-rated amongst those sugar mills which operated in at least one sugar season amongst the last three sugar seasons by taking into account their average production of sugar during the last three operational sugar seasons — 2021-22, 2022-23 and 2023-24,” as per the notification by Ministry of Consumer Affairs, Food & Public Distribution.
According to Industry sources, “the central government has approved the export of 10 lakh tonnes of sugar for the 2024-25 season, with deals finalized for 5 lakh tonnes and 2 lakh tonnes already exported. This move has benefited sugar mills, as export prices have reached Rs 44,000 per tonne. Export deals are being made at this price, with Maharashtra mills leading the exports. Sugar is being shipped to nearly a dozen countries, including African nations, Afghanistan, and Sri Lanka. With an additional 3 lakh tonnes of deals finalized, active price negotiations by mills have driven rates up. As a result, many sugar mills in Maharashtra are expected to offer farmers payments exceeding the Fair and Remunerative Price (FRP) for sugarcane this season.”
However, the decision to allow sugar export comes amid declining sugar production and the government’s push to expand ethanol production, aligning with its broader energy independence goals.
Sugar is an essential item under the government’s classification of commodities and is a controlled item. Around 90% of the sugar produced in the country is used in commercial food products like biscuits and beverages.
In the 2025 season, India’s sugar production is expected to witness a significant decline, with estimates falling below 27 million metric tons (MMT), down from 31.8 MMT in the previous year, according to a report by Centrum. This marks a sharp 12% drop in output, primarily due to the increased diversion of sugarcane for ethanol production and reduced cane availability across key producing states.
As of January 31, 2025, India’s sugar production has declined to 16.5 MMT, compared to 18.8 MMT during the same period last year.
The All-India Sugar Trade Association (AISTA) has revised its closing stock estimate to 4.5 million tonnes as of September 30, 2025. If this projection holds, it will mark the first time in many years that carryover stocks from one season to the next will fall below the two-month domestic consumption requirement. AISTA also highlighted that net sugar production includes the diversion of around 4 million tonnes of sucrose for ethanol production. The industry estimates the October-November demand at 4.8-5 million tonnes, driven by festival consumption.
Maharashtra has witnessed a sharp decline in sugarcane availability, falling nearly 15% year-on-year, which has significantly affected overall sugar production. Farmers in the state have reported lower yields due to irregular rainfall and crop flowering issues. AISTA noted that many sugar factories in Maharashtra are likely to close early, as crushing capacities have increased considerably even though the number of operational mills is lower than last year.
According to AISTA Chairman Praful Vithalani, the decline in sugar production in Uttar Pradesh this season is primarily due to the spread of red rot disease in the western region and flooding in the eastern region, along with lower cane polarisation (POL), resulting in reduced sugar recoveries.
State-wise data reveals that sugarcane crushing across the country has declined by 3.9% year-on-year, totaling 186 MMT by the end of January, compared to 193 MMT during the same period last year.
The National Federation of Co-operative Sugar Factories (NFCSF) reports that between October 1, 2024, and January 15, 2025, approximately 148.21 million tonnes of sugarcane were crushed, reflecting an 8% drop from 161.28 million tonnes in the same period last year. Sugar production during this period stands at 13.06 million tonnes, a decrease of 13.65% compared to 15.12 million tonnes an year earlier.
According to NFCSF’s latest crushing report, 507 mills were actively crushing sugarcane as of January 15, down from 524 during the same period last year. Uttar Pradesh has 122 operational mills, slightly up from 120 last year, while Maharashtra’s count has dropped to 196 from 206. Conversely, Karnataka has seen an increase, with 77 mills in operation compared to 74 last year. Together, Uttar Pradesh, Maharashtra, and Karnataka account for over 80% of the country’s total sugar production.
Moreover, the diversion of cane towards ethanol production has further contributed to the decline in sugar output. However, trader and industry sources indicated a more favorable outlook for the 2025-26 cane crop, supported by a good southwest monsoon in 2024, particularly in Maharashtra and Karnataka.
India is strengthening its commitment to sustainable energy with increased ethanol-blended fuel adoption and bio-ethanol-compatible vehicles. The country needs to divert about 4.5 million tonnes of sugar for ethanol production.
The Union Minister Nitin Gadkari, recently stated that India is on course to achieve its 20% ethanol blending target in the coming months, reaffirming the government’s focus on reducing crude oil imports.
Ethanol, derived from sugarcane and other agricultural sources, plays a crucial role in this transition, with sugar mills shifting their focus toward ethanol production. The increasing adoption of ethanol-blended fuels and the production of vehicles capable of running on 100% bio-ethanol by major automakers like Tata Motors, Mahindra & Mahindra, and Hyundai Motors underscore India’s commitment to sustainable energy.
This transition is also reflected in rising investments in ethanol-related ventures and the strong performance of sugar companies in the stock market. Leading sugar producers in the country include Dhampur Sugar Mills, Shree Renuka Sugars, and Dwarikesh Sugar Industries Praj Industries.
While the government’s decision to allow limited export of sugar provides short term relief to mills and farmers, the increasing shift of sugarcane toward ethanol production signifies a long-term transformation in the industry. By managing surplus stocks through controlled exports and boosting ethanol production to meet energy targets, India is redefining the future of its sugar sector. The emphasis on both exports and ethanol production reflects a strategic approach to balancing domestic supply concerns with international trade interests and achieving energy sustainability.
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