Two weeks after India permitted the export of one million tonnes (mt) of sugar, there has been minimal progress in terms of actual shipments out of the country. This is primarily because sugar mills are holding out for higher prices due to a surge in domestic prices.
“The trading (export) has been slow as mills are expecting higher prices. Domestic prices are rising as various associations have lowered their estimates for sugar production,” explained Dilip Patil, Managing Director of Samarth SKK Ltd and chairperson of Sugar Bioenergy Forum.
While only a small quantity of sugar has been traded for exports, many mills have managed to sell their export licenses at prices exceeding ₹44,000 ($505) a tonne.
According to reports, about 300,000 tonnes of sugar has been traded for exports, with the majority coming from mills in Uttar Pradesh. Mills in Maharashtra, Karnataka, and other states have accounted for around 70,000 tonnes of exports.
“Domestic prices have currently increased to ₹41,000 a tonne. So mills are looking at prices above ₹45,000 to export,” added Patil.
In the global market, white sugar in London was quoted at $519.90 a tonne for March delivery, while raw sugar on Intercontinental Exchange (ICE), New York, was quoted at 19.27 cents a pound (₹37,345 a tonne). Indian traders are quoting $530 a tonne for exports, which is considered expensive.
Despite the slow pace of exports, approximately 150,000 tonnes have been shipped to countries such as Bangladesh, Nepal, Tanzania, Sri Lanka, and Dubai.
Estimates for sugar production in India vary, with different associations providing different figures. The Indian Sugar and Bio Energy Manufacturers (ISMA) estimated production this season to be 27.27 million tonnes, while the All-India Sugar Traders Association pegged it at 26.52 million tonnes. The National Federation of Cooperative Sugar Factories forecast production at 27.10 mt, whereas MEIR Commodities estimates the net production at 28.10 mt.
In light of the varying production estimates and the Government allowing exports, retail sugar prices in the domestic market have increased to nearly ₹45 a kg. Globally, sugar prices are facing downward pressure due to the strengthening dollar and a positive outlook for the 2025-26 crop. Additionally, the projection of a larger-than-expected production in Brazil is also contributing to the bearish sentiment in the sugar market.
Overall, Indian sugar traders are hopeful that prices will rise in the global market, enabling them to find markets for their produce in importing nations. The Indian government had allowed exports of one mt of sugar for the current season on January 20, following industry representations to assist mills in paying dues to sugarcane farmers.
