Export Deals Face Delays as Domestic Sugar Prices Rise

Indian sugar mills have already signed agreements to export 600,000 tonnes of sugar for the 2024/25 marketing year. However, mills have been hesitant to ship quickly because local sugar prices have increased significantly, making exports less profitable.

The slower pace of sugar exports from India, currently the world's second-largest sugar producer, could help global prices recover from their lowest point in three years.

Rising Domestic Prices Affect Export Decisions

The Indian government initially banned sugar exports last year to stabilize local prices. In January 2025, it allowed sugar mills to export up to 1,0 million tonnes to clear surplus stocks. However, exports quickly slowed again as domestic sugar prices increased sharply due to lower production and rising local demand during the summer months.

Production Falls Short of Domestic Demand

India’s sugar production for the 2024/25 season is expected to be 25,8 million tonnes, significantly below the estimated 29 million tonnes domestic consumption. This shortfall has further boosted local prices, affecting the competitiveness of exports.

Rising Prices Make Indian Sugar Less Attractive Globally

India traditionally exports sugar mainly to Afghanistan, Bangladesh, Indonesia, Sri Lanka, and the UAE. Between 2018 and 2023, India averaged annual exports of about 6,8 million tonnes, placing it second globally.

However, due to higher domestic sugar prices, international buyers are now turning toward Brazilian sugar, which is competitively priced.

Sugar Mills Expect to Fulfill Export Quota by September

Despite current delays, sugar mills are still likely to achieve the 1 million-tonne export target by September. Prakash Naiknavare, Managing Director of the National Federation of Cooperative Sugar Factories Ltd., noted that mills have sufficient time to wait for global market conditions to become favorable.

Sugar mills anticipate increased export activities if domestic prices stabilize or if international demand improves in the coming months.