India rules out sugar export curbs and maintains duties on edible oils

Monsoon worries spark speculation that government may cut this year’s export allocations

Workers harvest sugarcane in a filed in Kolhapur district in the western state of Maharashtra, India, Nov 30, 2023. REUTERS/Rajendra Jadhav/File Photo

India, the world's second-largest sugar producer, has no plans to curb sugar exports, Food Secretary Sanjeev Chopra said on Tuesday, as a fall in domestic consumption partly offsets lower-than-expected output.

The South Asian country has allowed exports of 1.59 million metric tons on the assumption production would exceed local demand. However, output is projected to fall below consumption for a second consecutive year due to weaker cane yields in the biggest producing states.

Concerns over the upcoming monsoon have also led traders to speculate that the government could trim export allocations for the current year.

"There is no such proposal," Chopra said when asked whether India would impose a ban or curb sugar exports to divert supplies for ethanol production as a way of mitigating the disruption of crude oil supplies caused by the Iran war.

No Plans to Cut Import Duties on More Costly Edible Oils

India also has no plans to cut import duties on vegetable oils such as palm oil, soyoil, and sunflower oil, he said.

Edible oil prices in the world's largest importer have risen, driven by a rally in global prices and a weaker rupee, which has made imports more expensive.

India is likely to export between 750,000 and 800,000 tons of sugar in the 2025/26 marketing year ending in September, said Deepak Ballani, director general of the Indian Sugar & Bio-energy Manufacturers Association.

Sugar output in Maharashtra and Uttar Pradesh, the country's two largest sugar-producing states, has fallen short of expectations due to lower cane yields, Ballani said.

The country's gross sugar production is likely to be 32 million tons, lower than an estimate in February of 32.4 million tons, he said.

Consumption of sugar and edible oils has declined as a shortage of commercial gas cylinders has forced restaurants to scale back operations during the summer holiday season, industry officials told Reuters.

Sugar consumption in March fell by 200,000 tons, and demand is expected to drop by a similar amount in April, which will reduce the country’s total consumption in the 2025/26 marketing year ending in September, Ballani said.