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India Allows Sugar Exports Amid Lower Production Estimates

21 Jan 2025 1:49 pm
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MUMBAI, 21 Jan (Commoditiescontrol): In a significant policy move, the Indian government has approved the export of 1 million metric tons of sugar for the 2024-25 season, ending in September 2025. The decision, announced on Monday, aims to support sugar mills grappling with surplus stocks and stabilize domestic prices.

Food Minister Shri Pralhad Joshi emphasized that the move will strengthen the sugar sector while providing crucial price stability for the benefit of 50 million sugarcane farmers. To ensure equitable distribution, sugar mills have been allocated an export quota of 3.174% of their three-year average production, which can be exported directly or through merchant exporters.

This decision comes at a critical juncture as India, the world’s second-largest sugar producer, faces its first production shortfall compared to consumption in eight years. Trade estimates suggest that sugar production could decline to 27 million metric tons, down from 32 million metric tons last year, while domestic consumption hovers around 29 million metric tons. The drop in production is attributed to lower sugarcane yields in major producing states like Maharashtra, Karnataka, and Uttar Pradesh, which account for over 80% of India’s total output.

Despite the production dip, industry experts have welcomed the export decision. Deepak Ballani, Director General of the Indian Sugar and Bio-energy Manufacturers Association, noted, “Allowing limited exports of 1 million tons is good news for the sugar industry, especially as next year’s production is expected to rebound strongly.”

India, which exports sugar to countries like Indonesia, Bangladesh, and the UAE, had imposed a complete export ban during the 2023-24 season to prioritize domestic supply. This year’s export allowance provides a lifeline to mills struggling with low domestic prices, which are currently at their lowest levels in over a year.

However, the move has stirred global markets. Sugar prices, which dropped by over 1% on Monday, may face additional downward pressure due to India’s re-entry into the export market.

This calculated decision reflects a balancing act by the Indian government—offering relief to domestic producers while ensuring adequate supplies for the local market. As the season unfolds, global markets and industry players will closely watch the impact of India’s sugar export policy.

(By Commoditiescontrol Bureau; +91 98201 30172)


       
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