India has gone from planning sugar exports to opening the door to imports in less than a year—a sharp policy reversal that is putting the country’s sugar forecasts and supply management under fresh scrutiny.
The government has allowed duty-free imports of 1 million tonnes of raw sugar until October 31, its first such move in nearly a decade, as domestic prices surge ahead of the festive season. Sugar prices have climbed nearly 40% in two months, with ex-mill prices reaching ₹5,400–₹5,560 per quintal in major producing regions.
The move marks a dramatic shift from the policy stance taken in November 2025, when the government approved 1.5 million tonnes of sugar exports, later raising the limit to 2 million tonnes on expectations of a strong crop. But only around 800,000 tonnes were eventually exported before tighter domestic supplies forced the government to curb shipments.
Forecasts under Pressure
At the centre of the debate is a widening gap between early production forecasts and the eventual output.
The Indian Sugar & Bio-energy Manufacturers Association had initially estimated 2025-26 sugar production at 34.9 million tonnes. By March 2026, the All India Sugar Trade Association had cut its estimate to 28.3 million tonnes, a 4.4% reduction from its earlier forecast. Industry estimates now put net production at around 27.9 million tonnes, after accounting for sugar diverted toward ethanol.
The consequences are visible in the stockpile.
With opening stocks of 4.7 million tonnes, total availability was initially estimated at 32.6 million tonnes against domestic consumption of about 28 million tonnes. After exports, however, closing stocks fell to an estimated 3.5–3.9 million tonnes, well below the 6-million-tonne buffer considered necessary to cover roughly three months of consumption.
Was the Market Misread?
Industry views differ sharply over what drove the price spike.
Some executives argue that policymakers acted on overly optimistic production estimates and failed to respond quickly enough when supply pressures began emerging. CareEdge Ratings said the earlier forecasts created expectations of comfortable inventories, contributing to the decision to permit exports. By the time the situation became clearer, roughly 700,000–800,000 tonnes had already left the country.
But the industry is not unanimous.
ISMA Director General Deepak Ballani argues that production optimism was widespread and that weather-related damage in Maharashtra was difficult to anticipate. He maintains that stocks could still cover consumption into October and November and says the recent price surge is being amplified by speculative and panic buying ahead of the festival season.
A More Complicated Sugar Equation
The challenge extends beyond estimating how much sugarcane is available.
Farmer leader Anil Ghanwat argues that conventional production estimates can miss how cane is distributed among sugar mills, jaggery producers and ethanol plants. Lower sugar recovery rates at some mills have added another layer of uncertainty, while the economics of ethanol and other by-products are changing how cane is ultimately used.
That makes India’s sugar balance harder to calculate—and potentially more vulnerable to sudden shortages.
Government Tightens the Supply Chain
Alongside imports, the government is taking steps to prevent stockpiling.
From September 1 through November 30, bulk consumers using more than 10 tonnes of sugar a month will be restricted to holding no more than 15 days’ consumption. Mills have also reportedly been directed to dispatch sugar within seven days of sale, with the aim of preventing buyers from accumulating inventory simply because they expect prices to rise further.
The bigger question, however, is whether tighter controls can solve a forecasting problem.
Some industry voices are calling for a real-time, centralised sugar inventory system linking mill production, trader inventories and GST sales data, backed by periodic physical verification. Such a system could give policymakers a clearer picture of supply before export or import decisions are made.
The Bigger Policy Test
India’s sugar reversal highlights a difficult balancing act: keeping prices affordable for consumers while protecting farmers and mills, supporting ethanol production, managing exports and imports, and maintaining adequate food stocks.
The latest decision effectively completes a policy swing—from export optimism to import urgency.
The more important question now is whether India can build a reliable, real-time picture of its sugar economy, tracking everything from cane availability and mill recovery to ethanol diversion, jaggery production, exports, imports and domestic consumption.
For a market increasingly shaped by weather,