New Delhi, Nov 10 (NationPress) The government’s initiative to boost sugar exports is anticipated to positively impact the demand-supply dynamics, especially with a robust recovery projected in sugar production, as stated by industry analysts on Monday.

While the final directive is pending, reports indicate that the government has authorized sugar exports of up to 1.5 million tonnes (MT) for the 2025-26 season, an increase from 1.0 million MT for SY2025. This decision is based on the expected recovery in sugar production this season, which will help maintain a balanced domestic demand-supply scenario and support sugar prices.

“After accounting for an estimated diversion of 3.4 million MT towards ethanol production, net sugar production is projected to hover around 30.95 million MT. With the domestic consumption at 28 million MT and exports at 1.5 million MT, the closing sugar stock is expected to be around 6.8 million MT, equating to approximately three months’ worth of consumption, thus indicating adequate sugar inventory levels,” commented Ankit Jain, Vice President and Co-Group Head of Corporate Sector Ratings at ICRA.

However, Jain noted that the volume of sugar exports will be affected by international market prices, which are currently on a downward trajectory due to unprecedented sugar production levels in Brazil.

Furthermore, the abolishment of the export duty on molasses is likely to enhance the liquidity situation of sugar mills.

“The government’s decision to eliminate a 50 percent export duty on molasses is expected to significantly improve cash flow for sugar mills, lower storage expenses by curbing inventory accumulation, and enhance liquidity. This move should also contribute to the stabilization of domestic molasses prices,” stated Jain.

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has expressed support for the decision to authorize the export of 15 lakh tonnes of sugar this season.

“We applaud the government’s decision to allow the export of 15 lakh tonnes of sugar for this season. This timely intervention will enable us to better plan production for both raw and refined sugar and alleviate domestic stock pressures,” remarked ISMA Director General Deepak Ballani.

As the world's second-largest sugar producer, India exported 7.75 lakh tonnes of sugar during the 2024-25 marketing season, which runs from October 2024 to September 2025, according to a statement from the All India Sugar Trade Association (AISTA) released last month.

The primary destinations for India’s sugar exports included Djibouti with 1.46 lakh tonnes, Somalia at 1.35 lakh tonnes, and Sri Lanka with 1.34 lakh tonnes. Afghanistan followed with shipments amounting to 75,533 tonnes.

A remarkable 4.8 billion litres of ethanol is projected to be produced in the upcoming season using sugarcane-based feedstock.