Why India repeatedly restricts sugar exports amid falling output and supply concerns
India has banned sugar exports until September to protect domestic supplies amid falling stocks of 42–45 lakh tonnes, lower production of 320 lakh tonnes, rising ethanol diversion and weather risks. The move aims to stabilize prices as domestic consumption is estimated at 277 lakh tonnes.
Hyderabad: India’s decision to again restrict sugar exports until September reflects a mix of falling production, lower stock levels and rising domestic demand, highlighting the challenges faced by the world’s second-largest sugar producer after Brazil.
The government has moved sugar export policy from ‘restricted’ to ‘prohibited’, meaning traders cannot ship sugar abroad even with special approval. The step aims to ensure adequate domestic supply and keep prices stable, especially ahead of the festive season, ETV Bharat reported.
Officials point to declining stock levels as a key concern. Closing stock this year is estimated at around 42–45 lakh tonnes, one of the lowest since 2016–17. At the same time, sugar production is expected to be around 320 lakh metric tonnes, while domestic consumption is estimated at about 277 lakh metric tonnes.
Another major factor is the diversion of sugar for ethanol production. A significant portion of output is now used to produce ethanol for fuel blending, reducing the quantity available for export.
Weather conditions are also adding to uncertainty. The possible impact of El Niño could reduce rainfall, affecting sugarcane production in key states such as Maharashtra and Uttar Pradesh. In addition, rising fertiliser costs and global supply disruptions linked to tensions in West Asia could further impact yields.
Experts say that although India produces more sugar than it consumes in most years, maintaining a balance between domestic demand, exports and ethanol production has become increasingly complex.
The country’s sugar sector is heavily dependent on three states—Uttar Pradesh, Maharashtra and Karnataka—which together account for nearly 70 per cent of total production. However, in some regions, sugarcane cultivation has declined due to high input costs, water shortages and delayed payments from mills, pushing farmers towards alternative crops.
Globally, sugar prices and availability vary widely. Reports show sugar is cheapest in Pakistan and most expensive in Norway, while consumption patterns also differ significantly across countries.
India mainly exports sugar to countries in Asia, the Middle East and Africa, including Indonesia, Bangladesh, Saudi Arabia and the UAE. However, the latest export restriction is expected to impact neighbouring countries such as Nepal, which rely on Indian supplies.
Industry observers note that repeated export curbs are driven by the need to protect domestic supply, manage price volatility and address uncertainties in production. However, they also highlight the importance of a stable long-term policy to support both farmers and the sugar industry.
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Source : ChiniMandi
