After 10 Years, India May Import Sugar

India is set to import 1 million tonnes of raw sugar at zero duty after domestic stocks fell sharply and prices surged ahead of the festival season. Kindly note the image has only been published for representational purposes. Photograph: Kind courtesy Magda Ehlers/Pexels Key Points Sugar prices in Maharashtra have hit ₹5,400-₹5,560 per quintal, driven by consumption exceeding production in the 2025-2026 season. The decision to allow 1.5-2 mt of sugar exports earlier is now seen as a contributing factor to the current shortage, as 0.8 mt was shipped out. India's actual net sugar production for 2025-2026 is estimated at 27.9 mt (after ethanol diversion), with total availability of 32.6 mt against an estimated consumption of 28 mt. With exports factored in, closing stocks could drop to 3.5-3.9 mt, significantly below the normative 6 mt required for three months' consumption. After a gap of almost 10 years, India is set to import around 1 million tonnes (mt) of raw sugar at nil duty to cool down domestic prices, with the benchmark ex-mill price in Maharashtra reaching a high of ₹5,400-₹5,560 per quintal. The steep rise in prices since March 2026, just as the country is entering the high-consumption festival period, is largely attributed to bone-dry pipeline stocks with mills struggling to meet their monthly domestic sale quota. Factors Behind the Shortage Some experts said the decision to allow exports of 1.5-2 mt of sugar, when India was facing a shortage based on faulty production estimates, is also to blame. In November 2025, the Centre permitted exports of 1.5 mt, later raised to 2 mt. Around 0.8 mt was shipped out before exports were prohibited. A senior industry executive noted this was misleading the system, as production did not meet consumption. The crisis started from March 2026, when mills faced difficulties meeting their quotas. Production and Stock Levels India's net sugar production in 2025-2026 is around 27.9 mt after ethanol diversion. Opening stock was 4.7 mt, total availability 32.6 mt, and consumption estimated at 28 mt. Closing stocks drop to 3.5-3.9 mt when exports are included, leaving a shortage. Ideally, India should have 6 mt for three months' consumption. Government Response and Market Impact The government advised mills to advance crushing to maintain availability but noted imports may not significantly reduce prices. Prices could drop by ₹500 per quintal, but mills still profit above production costs. Raw sugar prices in New York hit a 14-month high due to India’s import plans.