Industry calls for calibrated review of export situation, says sudden decision may pose challenges
Indian Sugar & Bio-energy Manufacturers Association said India’s sudden sugar export ban, after permitting 15 LMT exports, may strain mill cash flows and contracted shipments. Around 6.5 lakh tonnes were already exported, while tighter stocks, El Niño risks and strong Brazil ethanol dynamics could support global sugar prices.
The Government has prohibited sugar exports by domestic mills with immediate effect. The Government had granted permission for 15 LMT of sugar exports, and an additional 87,587 tons of sugar were added to the total export. However, the decision stands reversed.
ChiniMandi has spoken to several industry experts and voices to gauge the extent of the impact the decision is likely to have on the industry, which is facing several policy challenges vis-à-vis the sugarcane MSP and ethanol procurement price.
Sugar balance-sheet is comfortable
The apex private sugar industry Association, the Indian Sugar & Bio-energy Manufacturers Association (ISMA), said that exports were permitted by the Government in November 2025 based on the then prevailing production estimates and an encouraging outlook for the sugar season. However, as the season progressed, sugar production in certain key states, particularly Maharashtra and Uttar Pradesh, was impacted due to lower-than-anticipated yields coupled with weather-related abnormalities, resulting in a moderation of overall actual production.
Deepak Ballani, DG, ISMA, said, “The current sugar season 2025–26 nevertheless remains broadly balanced, and the country is expected to maintain adequate closing stocks at the end of the season. As per informal reports, approximately 6.5 lakh tons of sugar exports have already been physically completed, while an estimated 40,000–60,000 tons are understood to be in the physical export pipeline under previously concluded contracts, as also permitted by the Government”.
He said that in view of the evolving domestic supply scenario and climatic uncertainties for the upcoming season 2026-27, including concerns relating to rainfall distribution during the ongoing monsoon period, ISMA acknowledges that the Government may have adopted a precautionary approach aimed at ensuring adequate domestic availability of sugar.
Order implication being examined
“While the industry was anticipating a calibrated review of the export situation in light of the above, the immediate nature of the present restriction may pose practical challenges in honouring certain export commitments already contracted with overseas buyers. In this regard, we believe that permitting execution of already concluded contracts may help facilitate orderly trade settlement and support the credibility of Indian suppliers in the global market,” Ballani said.
He said that further implications arising out of the present order are being examined in consultation with member mills.
Kapil Nema, an industry voice, said the sugar export ban visibly shows a tighter sugar stock situation, and the impact of the decision is twofold. He stated that on a short term basis, it’s a direct stress on exporters and a restricted cash flow situation of mills, who committed their cargo for exports for quick cash flow to pay to farmers and can prompt some distress sales by the mills themselves or the exporter. “In the medium term, the sugar could fetch better prices in future, due to lesser inventories, but it will be subject to deliberation on how the inventory pipeline of the country evolves from here. Though it is important to mention here that, based on the basis stock to use ratio, this is the tightest sugar balance sheet of the country in the last 10 years”, he said.
CS Brazil crop looks promising
Getting an international perspective on the development, Alessandra Rosette, Senior Sugar Analyst, said that the market was already considering the volumes exported so far this season as close to the maximum expected from India. “With the season already approaching its end, the immediate impact on the global balance sheet may therefore be relatively limited for 2025-26 at this stage. In addition, the new Center-South Brazil season started in April, and expectations still point to another large crop,” she said.
However, for the 2026-27 season, this becomes a more supportive element, especially as the market is already expecting a tighter global balance sheet compared to current expectations.
She added that the announcement should help support market sentiment, as it reinforces the idea of limited export availability from India going forward.
“At the same time, sugar is also finding support from stronger energy markets, Brazil’s ethanol dynamics, and increasing weather concerns linked to El Niño. This combination of factors may help limit downside pressure and keep the market better supported medium term,” concluded.
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Source : ChiniMandi
