Sugar Export Ban: ISMA Seeks Contract Execution

New Delhi, May 14 (PTI) Sugar industry body ISMA on Thursday urged the government to allow execution of already-concluded export contracts, even as the government imposed a ban on overseas sugar shipments effective May 13 through September 30.

The Indian Sugar & Bio-energy Manufacturers Association (ISMA), while acknowledging the rationale behind the government's move, said the abrupt nature of the restriction could create practical difficulties for mills that had entered into binding commitments with foreign buyers.

"Permitting execution of already concluded contracts may help facilitate orderly trade settlement and support the credibility of Indian suppliers in the global market," ISMA Director General Deepak Ballani said in a statement.

For the current sugar season 2025-26 (October-September), the Food Ministry had initially permitted exports of 1.5 million tonnes, subsequently opening an additional 500,000-tonnes window of which only 87,587 tonnes received approval.

Informal reports indicate that nearly 6,50,000 tonnes have already been physically exported, with an estimated 40,000-60,000 tonnes still in the pipeline under previously sanctioned contracts.

ISMA noted that exports were originally cleared in November 2025 on the basis of optimistic production estimates.

However, 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.

Despite the shortfall, ISMA maintained that the current season remains broadly balanced, with the country expected to close with adequate stocks by season-end.

Rating agency ICRA said the export ban would help arrest any sharp rise in domestic prices while safeguarding availability, given expectations of tighter closing inventories.

India's net sugar production for 2025-26, after accounting for ethanol diversion, is likely to come in at around 28 million tonnes, below earlier forecasts.

With domestic consumption pegged at 28.3 million tonnes and exports already executed at 0.7 million tonnes, closing stocks are projected at approximately 4.3 million tonnes by September 2026, equivalent to roughly two months of consumption, and marginally lower than in previous years, ICRA Vice President & Sector Head Rachit Mehta said.

The outlook for 2026-27 adds another layer of concern. The season is expected to be impacted by El Nino conditions, which could weigh further on sugarcane output and keep supply tight.

ISMA said it continues to examine further implications of the export order in consultation with member mills.