To ease the possibility of glut in the current sugar season (0ctober-September, the Government has allowed the export of 50,000 metric tonnes (MT) of organic sugar per annum with immediate effect.
According to a notification by the directorate general of foreign trade, the shipment of organic sugar has been shifted out of the ‘prohibited’ list for the exports of sweetener with immediate effect subjected to an annual ceiling of 50,000 tonnes.
Context
This move comes as the government allowed 1.5 million tonne (MT) of conventional sugar exports in the 2025-25 season (October-September) to balance stocks and support mill liquidity, while avoiding excessive pressure on domestic prices because of the possibility of sharp rise in output of sweetener.
“This move also aligns with the broader backdrop of India managing its sugar balance sheet,” Deepak Ballani, Director General, Indian Sugar and Bio-energy Manufacturers Association (ISMA), told FE.
Ballani said the government has been calibrating export quotas based on comfortable domestic stocks and evolving market dynamics, such as surplus production and ethanol diversion.
ISMA’s statement
ISMA stated that currently, organic sugar production in the country is limited, with only a small number of certified mills and exporters in operation, so this policy of allowing organic sugar exports will provide tangible encouragement for expansion and investment in organic cultivation and processing.
Industry sources said that the move would diversify India’s export portfolio but also incentivizes millers and farmers to adopt organic practices, potentially boosting value realization as organic sugar attracts premium prices overseas.
Organic sugar commands a premium in markets such as the United States, Europe and parts of Asia.
Ballani has stated that about 0.15 – 0.2 MT of export contracts out of 1.5 MT have been awarded or in the process of finalization, which the global prices much lower than the domestic ex-mill prices.
To protect farmers against the delay in cane payment due to the possibility of glut, the government is aiming to deal with surplus supplies through allowing additional exporters and diverting more sugar for ethanol production, food secretary Sanjeev Chopra recently stated.
In the current sugar season, where crushing activities are on, ISMA has projected sugar production at 34.3 MT, an increase of 16% from 2024-25 sugar. Out of total output, 3.4 MT would be diverted for ethanol manufacturing and 1.5 MT is approved for exports in the current season.
With annual consumption of sweetener in 2025-26 season is projected at 28.5 MT and opening balance as on October 1 was 5 MT, opening balance at the end of season is estimated at 6 MT, more than two months of consumption.