Senior government officials have been scrambling to reassess the decision to allow sugar exports due to reduced production estimates. The government is concerned about a possible spike in the domestic price of sugar in the coming months.
“The government has been left with options like either releasing less sugar to consumers or reducing diversion of sugar for ethanol blending or reducing sugar export,” said an official on the condition of anonymity.
India allowed export of 10 LMT of sugar in the first phase in January after industry body claims of record production of sugar.
Meanwhile, the Indian Sugar and Bioenergy Manufacture Associations (ISMA) remained confident that sugar output in current sugar would be higher. According to its release, India will have 54 lakh metric tonnes (LMT) of excess sugar in its stock by September 30, 2025.
However, ISMA has also been reducing its sugar production estimate. On March 12, it projected 272.5 LMT after diversion for ethanol; further, on March 19, it reduced its estimate to 264 LMT. ISMA also said a section of the trade body has been spreading rumours and misinformation about lesser sugar production that aim to create unrest in the sugar market.
Experts dispute claims about a higher sugar stock by the end of the sugar season in September 2025.
“It’s speculative to suggest that the next season will outperform the current one,” an official stated. “Due to the festive season, the domestic market will need around 50 LMT from a closing stock of 54 LMT in October-November. This year’s sugar production started lower output than last year due to adverse weather. If conditions don’t improve, India may need to import sugar," he added.
Meanwhile, it has been evident that since the start of the 2024-25 sugar season in October, sugar production and number of sugar mills in operation have been lagging compared to the previous year. Also, the sugar recovery rate (9.1%) this year is less than the previous year (9.95%).
Different assessments indicate that India may experience a decrease of approximately 60 lakh tonnes in sugar production compared to the previous year.
According to the National Federation of Cooperative Sugar Factories Limited (NFCSF), the country's largest federation of cooperative sugar mills, around 19% less sugar would be produced compared to the previous year. Currently, NFCSF estimates 259 LMT of sugar production, as against 319 LMT of total sugar production last year.
Further, according to the All India Sugar Trade Association (AISTA) revised estimate, sugar output would be around 258 LMT with a margin of error of (+/-) 2%.
Experts say the estimate of lower sugar output is based on the government’s recent estimate of reduced sugarcane production.