The world’s second-largest sugar producer amended the export policy for sugar, moving it to the “prohibited” category from “restricted”, in a notification issued Wednesday. The ban would apply to exports of raw, white, and refined sugar, per the notification.
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Sugar exports were earlier under a restricted category, necessitating a licence for outbound shipments.
“This prohibition is not applicable to Sugar being exported under: EU and USA under CXL (Codex Maximum Residue Limit) and TRQ (Tariff Rate Quota) quota, Advance Authorization Scheme, Government-to-Government exports, and consignments already in physical export pipeline,” the Directorate General of Foreign Trade (DGFT) said.
Outbound shipments of the kitchen staple would be allowed where loading on ships had commenced prior to publication of the notification and where the shipping bill has been filed and the vessel has berthed or arrived and anchored in a domestic port, with its rotation number allocated by the port authorities. Consignments handed over to customs or custodians before the issuance of the notification will also be cleared.
ET BureauApplies to raw, white and refined forms; net local production lower than estimates in 2025-26
“Sugar is an essential commodity and there is a thinking to build its buffer amid the ongoing crisis,” said a government official.
India had exported $1.9 billion of these varieties of sugar in FY25, with the top destinations being Sudan, Libya, Bangladesh, and Sri Lanka.
The daily average retail price of sugar was ₹46.68 per kg on Thursday, up from ₹45.82 per kg a year ago, according to dat from the Department of Consumer Affairs.
“The ban on sugar exports is a response to tightening domestic supplies,” said Pushan Sharma, director, Crisil Intelligence. “Domestic sugar prices have risen around 4% on-year between October 2025 and April 2026 and are expected to be overall almost 5% higher for sugar season 2026.”
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Rating agency Icra said net sugar production-post diversion for ethanol production-is likely to remain at around 28 million metric tonnes (MT) in the 2025-26 sugar season till September, lower than earlier expectations.
“Considering the domestic consumption of 28.3 million MT and export of 0.7 million MT (already done), the closing sugar stock level is expected to remain around 4.3 million MT by September 2026, which is about two months of consumption, indicating slightly lower sugar inventory levels compared to previous years,” Icra said in a note.
The sugar season is also expected to be impacted by forecasts of El Nino conditions this year, which could hit production of the sweetener. Output in key cane-growing states, particularly Maharashtra and Uttar Pradesh, fell short of projections due to lower-than-expected yields and adverse weather conditions.