Iran conflict may slow sugar exports, easing India’s tight supply
India may face tight sugar supplies as output risks falling below estimates and stocks remain thin. While exports were allowed, slower shipments to Gulf markets could retain 1.5 mt domestically. Industry data show production gains in key states, but early mill closures limit upside potential.
India could face a squeeze in sugar supplies later this year as production is projected to fall short of earlier estimates and reported stock levels leave little room for comfort. With limited quantities likely to be available at the start of the next season, the supply position appears delicate, though weaker exports to Gulf markets may offer some relief, The Hindu businessline reported.
At the same time, tensions following a joint strike by the United States and Israel on Iran and Iran’s retaliation may slow sugar shipments to India’s key export markets in the Gulf region. Lower exports could help improve availability within the country.
The government had permitted 2 million tonnes (mt) of sugar exports in two phases during the current season (October 2025–September 2026). However, industry experts say that only about 0.5 mt may actually be shipped, effectively keeping 1.5 mt within the country at a time when domestic production conditions are not very strong.
According to data compiled by the National Federation of Cooperative Sugar Factories Ltd, sugar mills reported stocks of 12.05 mt as of February 28. Domestic sugar production for the 2025-26 season stood at 24.63 mt by the same date, compared with 22.01 mt a year earlier.
The Indian Sugar & Bio-energy Manufacturers Association has estimated net sugar production for the current season at 29.29 mt, after excluding quantities diverted for ethanol. This suggests that around 4.66 mt could still be produced by September 30.
If this additional output materialises, combined with existing stock, total availability during March to September could reach 16.71 mt. Last year, 16.1 mt was allocated for domestic use during the same period, leaving only a narrow margin as carry-forward stock.
Industry veteran G K Sood said the reported stock figures appear lower than expected when compared with domestic allocation of 11.05 mt and production of 24.63 mt during October–February, along with a carry-over of 4.7 mt from the previous season. Even so, he said the overall sugar position remains tight, though imports may not be necessary.
The key concern, he added, is whether net production will match the estimated 29.3 mt or fall lower, possibly to around 28 mt.
Government data show that sugar allocation for the current season has been slightly reduced. Between October and March 2025-26, 13.3 mt was allocated, compared with 13.75 mt in the same period last year, a decline of 3 per cent. For March, the domestic sales quota has been fixed at 2.25 mt, slightly lower than 2.3 mt a year ago.
According to Food Ministry figures, sugar stocks as of February 28 were estimated at 4.93 mt in Maharashtra, 3.48 mt in Uttar Pradesh, and 2.09 mt in Karnataka.
Production data from the federation show that Maharashtra produced 9.52 mt during October–February, up 27 per cent from 7.49 mt a year earlier. Uttar Pradesh produced 7.41 mt, up 2 per cent from 7.24 mt, while Karnataka’s output rose 15 per cent to 4.41 mt from 3.83 mt last season.
The data also show that 248 sugar mills have stopped crushing operations so far this season, compared with 186 during the same period last year. This suggests limited scope for any major increase in production in the remaining months of the season.
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Source : Chinimandi
