Key Facts:
The net sugar production in India is 29.3 million tonnes (mt).
India is the world’s second largest exporter with volumes averaging 6.8 million tons annually.
Prime Highlights:
India will permit the export of 1 million metric tons of sugar for the current season.
Maharashtra, Karnataka, and Uttar Pradesh account for more than 80% of India’s total sugar production.
India’s sugar export markets include Indonesia, Bangladesh, and the UAE.
Key Background:
India is poised to permit the export of 1 million metric tons of sugar for the current 2024-25 season, a decision that could impact global sugar prices and help local mills manage surplus stocks. The move comes in response to a potential production shortfall, as India’s sugar output is expected to fall below consumption levels for the first time in eight years. The official order to allow the exports is expected to be issued shortly, according to government and industry sources, who spoke anonymously.
India is the world’s second-largest producer of sugar, and the new export measure is seen as a strategy to mitigate the effect of excess sugar in the domestic market. The country’s top sugar-producing states—Maharashtra, Karnataka, and Uttar Pradesh—account for over 80% of total sugar production. However, the 2024-25 season has seen lower cane yields in these regions, leading to reduced production estimates. Industry experts project that India’s sugar output could decrease from 32 million tons in the previous season to around 27 million tons, falling below annual consumption of more than 29 million tons.
Despite this projected shortfall, the decision to allow exports of 1 million tons has raised concerns about its potential impact on global sugar prices, which may face downward pressure due to India’s export activities. The country has historically been a key exporter of sugar, with markets in Indonesia, Bangladesh, and the UAE. Between 2018-2023, India was the second-largest exporter globally, averaging annual exports of 6.8 million tons.
In response to the export decision, the Indian Sugar and Bio-energy Manufacturers Association (ISBMA) welcomed the move, acknowledging that it would help stabilize local sugar mills grappling with low domestic prices. The current price of sugar in India is at its lowest point in 18 months, adding further strain to the industry. Deepak Ballani, Director-General of the ISBMA, stated that with a strong production outlook for the next season, allowing limited exports would benefit the sugar sector. The decision reflects India’s broader strategy to support its sugar industry and manage domestic price fluctuations while engaging in global trade.