India's sugar surplus allows exports to commence in October despite the ongoing E20 fuel program initiatives.
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India is contemplating permitting sugar exports starting in October, buoyed by promising indicators of a robust sugarcane harvest. Early projections suggest a potential bumper crop, spurred by expanded acreage and favorable monsoon rains across key producing regions. This move aligns with India's dual strategy of promoting clean fuel initiatives through ethanol blending while ensuring sufficient domestic sugar availability.

The anticipated surge in sugar production is noteworthy. The National Federation of Cooperative Sugar Factories Ltd. forecasts a substantial 19% increase in production for the 2025-26 season, as cane acreage expands in major growing states like Maharashtra and Karnataka. Industry sources project an output of 355 lakh tonnes in the 2025-26 season, compared to the normal production range of 280-290 lakh tonnes. Coupled with a carry-forward stock of 55 lakh tonnes from the previous season, the total available sugar could reach around 400 lakh tonnes.

A significant portion of this surplus is expected to be diverted towards ethanol production. Sugar factories may divert at least 4 million tons of sugar to make ethanol in 2025-26 to avoid a domestic surplus, compared to more than 3.2 million tons this season. Dilip Patil, the co-chairman of the Indian Federation of Green Energy (IFGE), estimates that around 50 lakh tonnes will be used for ethanol production, with hopes of exporting another 20 lakh tonnes. He anticipates domestic consumption to be around 275 lakh tonnes out of a 330 lakh tonne stock, leaving the remainder for the 2026-27 season.

The government's push for ethanol blending is a key driver behind these projections. The aim is to achieve 20% ethanol blending with gasoline (E20). To achieve this target, the government has been incentivizing the cane industry to expand their distillation capacity.

However, India's sugar export decisions are sensitive, with the Centre adopting a cautious approach. In the 2024-25 sugar marketing year (October - September), India only exported 6.44 lakh tonnes of sugar against the allowed quota of 10 lakh tonnes. Trade bodies and industry associations have started lobbying for an early declaration of export quotas. The Indian Sugar and Bio-energy Manufacturers Association has urged the government to permit the export of 2 million metric tons of sugar for the 2025/26 season, beginning in October.

Allowing overseas shipments from India, the world's second-largest sugar producer, could exert downward pressure on global sugar prices. New York futures are already hovering near a four-year low. India introduced an export quota system in 2022-23 after dry weather and crop diseases impacted output. The country had permitted mills to ship up to 1 million tons this crop year.

Notably, the government had previously restricted sugar exports to keep domestic prices in check and ensure sufficient supplies for both consumption and the ethanol blending program. This restriction, implemented in May, categorized exports of raw, refined, and white sugar as "restricted," requiring special permission from the Ministry of Consumer Affairs, Food and Public Distribution.

Despite strong production figures, the economics of sugar mills heavily rely on government-granted export quotas. The industry is banking on an early decision regarding sugar exports.


Written By
Meera Joshi, an enthusiastic journalist with a profound passion for sports, is dedicated to shedding light on underreported stories and amplifying diverse voices. A recent media studies graduate, Meera is particularly drawn to cultural reporting and compelling human-interest pieces. She's committed to thorough research and crafting narratives that resonate with readers, eager to make a meaningful impact through her work. Her love for sports also fuels her drive for compelling, impactful storytelling.
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