ISMA says sugar export curbs may affect existing contracts, cites domestic supply concerns
New Delhi, May 14
Indian Sugar & Bio-energy Manufacturers Association has taken note of the government's decision to place sugar exports under the "Prohibited" category with immediate effect till September 30, 2026, saying the immediate restriction may pose practical challenges in honouring certain export commitments already contracted with overseas buyers.
Reacting to the order, Deepak Ballani, Director General, ISMA, said exports had been permitted by the government in November 2025 based on prevailing production estimates and an encouraging outlook for the sugar season.
"However, as the season progressed, sugar production in certain key states, particularly Maharashtra and Uttar Pradesh, was impacted due to lower-than-anticipated yields coupled with weather-related abnormalities, resulting in a moderation of overall actual production," he said.
He said the 2025-26 sugar season remains broadly balanced and the country is expected to maintain adequate closing stocks at the end of the season. According to ISMA, around 6.5 lakh tonnes of sugar exports have already been completed, while an estimated 40,000-60,000 tonnes are in the physical export pipeline under previously concluded contracts.
"In view of the evolving domestic supply scenario and climatic uncertainties for the upcoming season 2026-27, including concerns relating to rainfall distribution during the ongoing monsoon period, ISMA acknowledges that the Government may have adopted a precautionary approach aimed at ensuring adequate domestic availability of sugar," Ballani said.
He added that permitting execution of already concluded contracts may help facilitate orderly trade settlement and support the credibility of Indian suppliers in the global market.
India had on Wednesday banned sugar exports with immediate effect until September 30, 2026, or until further orders, shifting the export status of raw sugar, white sugar and refined sugar from the "Restricted" list to the "Prohibited" category.
The decision was notified by the Directorate General of Foreign Trade under the Ministry of Commerce and Industry.
The notification said the prohibition will not apply to exports to the European Union and United States under CXL and TRQ quotas, and shipments under the Advance Authorisation Scheme will continue as per the Foreign Trade Policy 2023.
The government also allowed consignments already in the physical export pipeline, including shipments where loading had commenced before the notification and those already handed over to customs authorities.
— ANI
Reader Comments
It's interesting to see the Indian government taking such preemptive steps. Having lived through the 2022 inflation fears back home in the US, I appreciate when authorities prioritize domestic needs. The exemption for EU/US quotas is clever diplomacy — maintains critical trade relationships while protecting what matters most for Indian consumers.
I think both sides have valid points. Yes, India's sugar mills entered contracts in good faith based on initial 2025-26 production estimates. But then weather in Maharashtra and UP changed the game. The government's precautionary approach regarding the upcoming monsoon season 2026-27 makes sense — better safe than sorry! India's credibility in global trade matters, but not at the cost of empty shelves at home. 😕
Practical challenge indeed. From a logistics perspective, 40-60k tonnes of sugar sitting in the export pipeline with contracts already signed is messy. However, I respect India's sovereign right to adjust policies based on evolving data. The CXL/TRQ exemptions show careful nuance. Global food security begins at home, as we learned during COVID supply chain disruptions.
The government's decision seems very reactive. If they were watching production data throughout the season, why issue permits in November 2025 without proper buffers? Now ISMA and Indian sugar suppliers will lose face internationally. Even the 6.5 lakh tonnes already exported might not balance out the reputational damage. Modi ji's government should have been more strategic about this. 😔
I support the ban. As a farmer from a family that grows sugarcane, I've seen how erratic weather and policy flip-flops hurt us
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