India to restrict exports of sugar?


The world’s sugar supply balance is expected to diminish in the 2021-22 season mainly due to lower production in Brazil. Despite India likely to witness a record quantity of sugarcane, the enhanced push towards blending of ethanol will take the equivalent of three and a half million tonnes of sugar out of the market, resulting in a sugar production of around 31 million tonnes. Rumors have been flying in the global sugar market about India restricting / banning / imposing a limit on exports of sugar.

In conversation with ChiniMandi News, Mr. Subodh Kumar Singh, Joint Secretary (Sugar, Admn. & CVO) shared,  “The Government of India is constantly monitoring and keeping track of the production, and offtake numbers. While exports are taking place we are keeping watch on sugar production and domestic demand for sugar and ensuring sufficient availability of sugar for domestic consumption. We will take any appropriate decision at any time if required.”

Recently the Department of Food & Public Distribution notified sugar millers to furnish data on export of sugar in current sugar season 2021-22 by the 7th Day of every month. To view the notification, click here

According to ISMA’s latest update (30th Nov, 2021), sugar exports for about 35 lac tons has already been contracted for exports in the current sugar season 2021-22.  Most of these contracts were signed when the global sugar prices were in the range of 20-21 cents per pound of raw sugar.  However, with a fall in the global prices to below 20 cents, and now to around 18.6 cents per pound of raw sugar, the Indian sugar mills are not coming forward to sign further export contracts. Considering the domestic ex-mill sugar prices in the western and southern part of the country and the global prices of around 20-21 cents per pound, prevailing in the last couple of months, most of the export contracts of the 35 lac tons, are by the sugar mills from Maharashtra and Karnataka.  The ex-mill sugar prices in north India are slightly higher to western and southern part of the country, and therefore not much export contracts have taken place from the northern region.

Considering the domestic ex-mill prices and the costs of the production of sugar at the increased FRP and SAP for sugarcane for 2021-22 season, it is expected that the sugar mills will enter into further export contracts only after world prices increase to around 21 cents per pound of sugar.  Considering that a substantial quantity of around 34 lac tons of sugar equivalent is estimated to get diverted into ethanol production, the pressure on the sugar mills to immediately contract for further exports is less.  Therefore, it seems that the sugar mills will wait for an upward revision of the global prices to around 21 cents or more.


Please enter your comment!
Please enter your name here