India bans sugar exports, opening the door for Brazil and Thailand
The export halt, effective until September 30, 2026 or further orders, is set to reshape sugar flows as India prioritises domestic supply.
- India, the world's second-largest sugar producer, has banned sugar exports until September 30, 2026, to control rising domestic prices.
- The decision was prompted by expectations that sugar production will fall short of domestic consumption for a second consecutive year, with concerns over El Niño's potential impact.
- The ban is expected to increase global sugar prices and create a market opportunity for competitors Brazil and Thailand to increase their shipments.
India has stopped sugar exports with immediate effect, saying on Wednesday (May 13) that shipments would be barred until September 30, 2026, or until further orders, as the world’s second-largest sugar producer seeks to contain domestic prices.
The ban covers both raw and white sugar, although the government said some cargoes already moving through the export process would still be allowed under specific conditions.
India, the biggest sugar exporter after Brazil, had earlier permitted mills to ship 1.59 million metric tons overseas on the assumption that production would be higher than domestic demand. That outlook has changed, with output now expected to fall short of consumption for a second year in a row as cane yields weaken in key growing areas.
Concerns have also grown over forecasts that El Niño conditions could affect this year’s monsoon, creating a risk that next season’s sugar production may come in below early projections.
Dealers said traders had agreed export contracts for about 800,000 tons out of the 1.59 million metric tons approved by the government. More than 600,000 tons have already been shipped.
Under the notification, consignments may proceed if loading had started before the order was published in the Official Gazette. Exports will also be cleared if a shipping bill has been filed and the vessel has already berthed, arrived or anchored at an Indian port.
The government said shipments would further be allowed where sugar had been handed over to customs or a custodian before the notification was published.
"The government had provided additional export quotas in February, which encouraged traders to sign export deals. It will now be a headache for traders to fulfil those export orders," said a Mumbai-based dealer with a global trade house.
The move is expected to support global prices for both white and raw sugar, while giving competing producers Brazil and Thailand room to increase shipments to buyers in Asia and Africa.
After India announced the export ban, New York raw sugar futures rose further to more than 2%, while London white sugar futures climbed 3%.
Reuters
