India bans sugar exports until September 2026 to cool local prices

Mangalore Today News Network

New Delhi, May 14, 2026: India has banned the export of sugar with immediate effect until September 30 (or until further orders), the government said on Wednesday. The move to tighten overseas shipments comes amid domestic supply considerations.

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 surplus production.

The notification adds that shipments would be permitted if loading had commenced before May 13 or if consignments had already been handed over to customs authorities before the order took effect. "The export of sugar shall be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments," the order read.

Last month, the Indian Sugar & Bio-Energy Manufacturers Association projected India’s gross sugar production at 32 million tonnes in the season ending September 30. This was revised from an earlier estimate of 32.4 million tonnes. Therefore, experts see this export ban as a move to contain inflation risks amid mounting uncertainty triggered by the ongoing conflict in the Middle East.

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.

Inflation, Supply Risk Trigger Sugar Export Ban?

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.

The government is also worried about the next season. Production in 2026-27 could fall. This is because rains may turn weaker due to El Niño. There are also concerns about fertiliser shortages linked to the Middle East crisis.

Notably, the sudden change in policy could hurt traders and sugar mills. Many had already signed export deals, and now face uncertainty.

Global markets reacted quickly. Raw sugar futures in New York rose more than 2 per cent. In London, white sugar futures jumped by around 3 per cent.

India is the world’s second-biggest sugar producer after Brazil. It is also a major exporter. When India tightens supply, global availability shrinks, especially for buyers in Asia and Africa.