India Bans Sugar Exports Until Sept 2026 To Cool Off Prices

The government banned sugar exports with immediate effect until Sept. 30, 2026, or until further orders, as the world's second-largest sugar producer tries to cool off local prices. The move is likely to support the global white and raw sugar prices, while allowing rival producers Brazil and Thailand to boost shipments to Asian and African buyers. India, the world's biggest sugar exporter after Brazil, allowed mills to export 1.59 million metric tons, betting output would exceed domestic demand.

But production is now expected to lag consumption for a second consecutive year as cane yields weaken in major growing regions. The order, issued by the Directorate General of Foreign Trade under the Ministry of Commerce and Industry, specifies that the ban applies to raw, white and refined sugar. It also marks a shift in policy from "restricted" to "prohibited". This is a major policy reversal as the government had earlier allowed limited sugar exports on expectations of a surplus production.

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Forecasts that El Nino weather conditions could disrupt this year's monsoon season have also raised the risk that next season's output falls below initial estimates. Of the 1.59 million metric tons approved for export, traders signed contracts for about 800,000 tons, of which more than 600,000 tons have already been shipped, according to a report by news agency Reuters.

In an official notification, the government said it would prohibit the exports of raw and white sugar, while allowing shipments already in the export pipeline to proceed under specified conditions. It said consignments would be permitted if loading had already begun before publication of the notification in the Official Gazette. Exports will also be allowed where a shipping bill had been filed and the vessel had already berthed, arrived or anchored at an Indian port, as per the report.

India is expected to produce about 275 lakh tonnes of sugar in the 2025-26 season, which runs from October to September. Add to that around 50 lakh tonnes of opening stock, and total supply comes to nearly 325 lakh tonnes. Meanwhile, the demand at home is likely to touch about 280 lakh tonnes. That leaves closing stocks at just 45 lakh tonnes. This is the lowest level since 2016-17, when stocks had dropped to around 39.4 lakh tonnes. Last month, the Indian Sugar & Bio-Energy Manufacturers Association projected India's gross sugar production at 32 million tonnes in the season ending Sept. 30.

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Significantly, the ban will not apply to sugar exports to the European Union and the United States under existing tariff-rate quota and arrangements, the government said. Shipments will further be cleared if sugar had been handed over to customs or a custodian prior to publication of the notification, it added. Global markets reacted quickly as New York raw sugar futures extended gains to over 2%, while London white sugar futures jumped 3% after India announced the ban on exports.

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