On November 14, the Indian government authorized sugar mills to export 1.5 million tonnes (mt) of sugar during the 2025-26 season (October-September). Industry sources report that contracts for over 100,000 tonnes have already been finalized for spot delivery by mid-January, with shipments currently underway.
Initially, there were concerns that Indian sugar would struggle to compete in the global market. However, with the rupee recently surpassing the psychological threshold of 90 against the dollar, it is expected that more contracts will be signed soon. Notably, the 100,000 tonnes contracted were based on a dollar rate of approximately ₹88.
Key markets expressing interest in Indian sugar include Afghanistan, Sri Lanka, Somalia, Yemen, Kenya, and various countries across the Middle East and Africa. Although exporters have differing views on the contractual prices, one exporter indicated that contracts were primarily set at $440-450 per tonne (FOB) from a West Coast port.
M. Madan Prakash, Director of Chennai-based Rajathi Group, which exports agricultural products, mentioned that prices were recorded at $510 cost and freight for Kenya, and $470 per tonne for Bandar Abbas (Iran). He emphasized that there are significant inquiries for Indian sugar from several nearby markets.
The Food Ministry allocated export quotas among operational sugar mills based on their average production over the past three seasons. Each mill received a uniform quota of 5.286% of their average production during that period. The government allows mills to manage the export quantity either directly or through merchant exporters/refineries. Many mills in Uttar Pradesh have reportedly sold their quotas to exporters, with trade estimates placing this figure between 30,000 and 40,000 tonnes.
The National Federation of Cooperative Sugar Factories (NFCSF) has urged the government to approve an additional 1 mt for export, beyond the already permitted 1.5 mt. The federation argues that this would not only boost domestic market sentiment and stabilize domestic sugar prices but would also minimally impact the current low international sugar prices, given the limited quantities of Indian sugar entering the global market.
The cooperative sugar factories have pointed out that India is expected to have a domestic consumption of 29 mt and an opening stock of 5 mt as of October 1, 2025, resulting in around 7.5 mt remaining in mill storage. This surplus could lead to significant financial burdens due to increasing interest on loans.
Last week, the Ministry of Agriculture and Farmers Welfare released its first advanced estimate for kharif crops, revealing that sugarcane production is expected to rise to 475.6 million tonnes, compared to 454.6 million tonnes the previous year. Additionally, sugar production in the first two months of the current season, which began on October 1, has increased by 50% to 4.14 million tonnes.
(With inputs from Subramani Ra Mancombu, Chennai)
Published on December 3, 2025
