Sugar export ban to help maintain domestic supplies as stocks tighten: ICRA
India’s sugar export ban until September 2026 aims to maintain domestic supplies as end-season stocks may remain tight at 4.3 million tonnes. Despite higher production, ethanol diversion and consumption will absorb supplies, while potential El Niño risks could affect 2026/27 sugar output.
The Centre’s decision to ban sugar exports until September 30, 2026, will help ensure adequate domestic availability as sugar inventories are expected to remain tight at the end of the current season, according to a report by Icra.
The rating agency said gross sugar production in Sugar Year (SY) 2026 is projected to rise by 5.03 per cent to 31.10 million tonnes. However, after diverting an estimated 3.1 million tonnes of sugar towards ethanol production, net sugar output is expected to remain at around 28 million tonnes, Businessworld reported.
With domestic sugar consumption estimated at 28.3 million tonnes and exports of 0.7 million tonnes already completed, closing stocks are projected at around 4.3 million tonnes by September 2026. Icra noted that this would be equivalent to nearly two months of domestic consumption and slightly lower than inventory levels seen in recent years.
The agency also cautioned that the upcoming SY2027 season could face challenges from a possible El Niño weather pattern, which may affect sugarcane production and result in lower sugar output.
India’s sugar production stood at 27.48 million tonnes as of April 15, 2026, up 8 per cent from 25.50 million tonnes recorded during the same period a year earlier. The increase was driven by better sugarcane availability and improved yields in major sugar-producing regions.
Icra noted that India’s ethanol blending programme continues to maintain momentum, with the blending ratio remaining at 20 per cent during the first six months of Ethanol Supply Year (ESY) 2026. A total of 510 crore litres of ethanol was blended during the period, including 93 crore litres in April alone.
The report also highlighted a sharp decline in global sugar prices. Raw sugar prices fell to USD 310 per tonne in April 2026 from USD 401 per tonne a year earlier, while white sugar prices declined to USD 426 per tonne from USD 509 per tonne during the same period.
According to Icra, the export ban is expected to support domestic market stability at a time when stock levels are projected to remain relatively tight despite higher sugar production.
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Source : ChiniMandi
