ISMA says sugar export curbs may affect existing contracts, cites domestic supply concerns

New Delhi [India], May 14 : Indian Sugar & Bio-energy Manufacturers Association (ISMA) 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.

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