The government has banned sugar export till end of September, to keep domestic prices stable amid expectations of lower sugar closing inventory and a likely drop in sugar production 2026-27 sugar season (October-September).
The Directorate General of Foreign Trade amended the export policy for raw sugar late on Wednesday, changing the status of white sugar and refined sugar from ‘restricted’ to ‘prohibited’ until September 30, 2026, or until further orders, whichever is earlier.
Indian Sugar and Bio-energy Manufacturers Association (ISMA) termed the government’s move to restrict sweetener exports as a response to evolving domestic supply scenarios and climatic uncertainties for the upcoming season (2026-27).
According to ICRA, net sugar production, after ethanol diversion, is likely to remain around 28 million tonne (MT) which is lower than earlier expectations. The agency stated that considering domestic consumption of 28.3 MT and export of 0.7 MT, the closing sugar stock level is expected to remain around 4.3 MT by September 2026. This is about two months of consumption, indicating slightly lower sugar inventory levels compared to previous years.
Inventory Alert
“The government’s move will curb any major increase in domestic prices while ensuring domestic availability amid expectations of lower sugar closing inventory and next year’s production,” said Rachit Mehta, vice president, ICRA.
The government permitted the export of sweetener in November 2025 based on the prevailing production estimate at that time. Industry sources said that as the season progressed, sugar production in Maharashtra and Uttar Pradesh, was adversely impacted by weather-related issues.
According to the ISMA, around 0.65 MT of sugar has been exported so far while an estimated 40,000 – 60,000 tonne is being shipped under the previously concluded contracts.
For the 2025-26 sugar marketing season (October-September), the food ministry had allowed 1.5 MT of exports in November 2025. In February 2026, it gave nod for an additional 500,000 tonnes shipment of sweetener
“While the industry was anticipating a calibrated review of th export situation, the immediate nature of the present restriction may pose practical challenges in honouring certain export commitments already contracted with overseas players,” said Deepak Ballani, director general, ISMA. The association urged that permitting the execution of already concluded contracts may help facilitate orderly trade settlement and support the credibility of Indian suppliers in the global market.
As on the end of April, 2026, total sugar production according to ISMA was 27.52 MT, 7% higher than previous season while only 5 factories out of 539 units were operational.
Sugar company stocks decline
Shares of major sugar companies – Triveni Engineering, Balram Chini, Shree Renuka Sugar and Mawana Sugar- declined on Thursday following the announcement of the government banning sweetener shipment.
Shares of Balrampur Chini and Triveni Engineering declined by 1.63% and 1.57% to Rs 545 and Rs 383 respectively on the BSE on Thursday compared to the previous day’s trading, while Shree Renuka Sugar shares declined by 2.41% to Rs 24.
Shares of Mawana Sugar declined by 4.18% to Rs 104 on Thursday.