India contracts over 100,000 tonnes of sugar for export, more likely amid weakening INR
After the government on November 14 permitted Indian sugar mills to export 1.5 million tonnes (mt) of sugar during the 2025-26 season (October-September), contracts have been completed for over 100,000 tonnes so far for spot delivery by mid-January with shipments started moving now, industry sources said.
After the permission, it was feared that Indian sugar would not be economically viable to compete globally, but with rupee now breaching the psychological barrier of 90 against dollar, t more contracts will likely be signed in the next few days, an industry expert said, adding these 100,000 tonnes were contracted when dollar was about ₹88.
Major destinations showing interest for Indian sugar include Afghanistan, Sri Lanka, Somalia, Yemen, Kenya and some other countries in the Middle East and Africa, trade sources said. While exporters are divided on the contractual prices, one exporter said the contracts were mostly at $440-450/tonne (FOB) from a port on the West Coast.
Uniform export quota
M Madan Prakash, Director at Chennai-based Rajathi Group that exports agri products, said prices for Kenya were $510 cost and freight, while for Bandar Abbas (Iran), they were $470 a tonne.
“There are good enquiries for Indian sugar from many nearby origins,” he said.
The Food Ministry last month allocated the quota on pro-rata basis among all the operational sugar mills based on their average production during last three sugar seasons. “All the sugar mills have been allocated an uniform quota of 5.286 per cent of their 3 years average production of sugar,” it said in the letter to all the mills.
As the government has permitted mills to export the quantity either themselves or through merchant exporters/refineries, many of the mills in Uttar Pradesh have sold their quotas to exporters and trade estimates put it at 30,000-40,000 tonnes.
Plea for more
The National Federation of Cooperative Sugar Factories (NFCSF) has requested the government to allow an additional 1 mt for exports, over and above already permitted 1.5 mt. “This move would not only help improve domestic market sentiment by firming domestic sugar prices, but will not adversely impact the current low international sugar prices in view of small trenches of Indian sugar entering global market,” it said last week.
The body of cooperative sugar factories has cited that against an expected domestic consumption of 29 mt and opening stock of 5 mt (as on October 1, 2025), India will have a balance of about 7.5 mt in sugar mills’ godowns and this would block huge funds mounting interest burden on mills.
Last week, the Ministry of Agriculture and Farmers Welfare in its first advanced estimate of kharif crops said sugarcane production is estimated to increase to 475.6 million tonnes from 454.6 million tonnes last year. Sugar production in the first two months of the current season, which began on October 1, increased by 50 per cent to 4.14 million tonnes.
(With inputs from Subramani Ra Mancombu, Chennai)
Published on December 3, 2025
