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Published : 21 Jan 2025, 08:55 AM
India on Monday allowed exports of 1 million metric tonnes of sugar during the current season to September 2025 to help mills of the world's second biggest producer export surplus stocks and help prop up local prices.
The decision could put further downward pressure on global prices , which fell more than 1% on Monday.
The government has approved an export quota to strengthen the sugar sector by providing price stability and supporting 50 million cane growers, the Food Minister Pralhad Joshi said.
Reuters reported on Sunday that New Delhi was set to allow the exports to support local sugar prices that had come under pressure in recent months.
The Food Ministry has allocated mills a uniform export quota of 3.174% of their three-year average production, which they can export directly or via merchant exporters.
Exports help sugar mills generate crucial revenue, ensuring timely cane payments to farmers, said Deepak Ballani, director general at the Indian Sugar & Bio-Energy Manufacturers Association (ISMA).
Although there had been speculation for weeks that exports would be allowed, the decision surprised some traders as this season's production is expected to fall below consumption for the first time in eight years.
Production could fall to around 27 million tons from 32 million tons last year and below annual consumption of more than 29 million tons, according to leading trade houses.
India, which sells sugar to Indonesia, Bangladesh and the United Arab Emirates among others, was the world's No. 2 exporter during the five years to 2022-23, with volumes averaging 6.8 million tons annually.
It did not allow exports in the 2023-24 marketing year.
India's re-entry to the global market sets the stage for significantly higher exports in the next marketing year, beginning in October, said Vishal Nirani, director at Nirani Sugars.
