India set to exit global sugar market for two to three years
India, once the world's second-largest sugar exporter, may stay out of the global market for two to three years as El Niño hits cane crops and ethanol diversion drains its surplus, according to Jagran. Exports have fallen from 6.8 million tonnes to about 800,000, and the country could become a sugar importer by 2027-28.
India poised to step back from sugar exports
India could remain largely absent from the global sugar export market for the next two to three years, according to a report by Jagran, tightening supply for importers across Asia, Africa and the Middle East. The country, once the world's second-largest sugar exporter, is watching its exportable surplus disappear under the combined pressure of El Nino weather stress and a rapidly expanding ethanol programme.
A surplus shrinking from 6.8 million to 800,000 tonnes
The scale of the pullback is stark. India shipped an average of 6.8 million tonnes of sugar a year at its peak, but exports have since collapsed to roughly 800,000 tonnes, Jagran reports. That decline strips a major supplier from the market. To keep domestic prices under control, the government has already banned sugar exports until 2026, removing one of the largest sellers at a time when global buyers have few alternatives.
El Nino and ethanol pull cane away from sugar
Two forces are draining the surplus. El Nino has raised the risk of a weak monsoon, directly affecting cane cultivation: reduced rainfall is hitting sowing and threatens to cut output. Weather specialists have already warned that El Nino can weaken agricultural production in countries such as India, raising both food inflation and supply risks.
The second force is policy. New Delhi is pushing higher ethanol blending in petrol, so a growing share of cane is being turned into fuel rather than sugar. Cane that was once crushed for sugar is now diverted to ethanol, tightening supply even further. Unlike a weather shock, this diversion is a deliberate policy choice, which makes the loss of sugar availability more durable.
From exporter to importer
The domestic balance is turning negative. Jagran estimates Indian sugar production at about 27.9 million tonnes against domestic consumption of around 28.5 million tonnes, meaning demand outstrips output and stocks could fall to historic lows. If the trend continues, India may have to import sugar by 2027-28, the first time in a decade.
For trade, the consequences are direct. As India retreats as a seller and potentially becomes a buyer, importing countries in Asia, Africa and the Middle East face lower availability and the prospect of higher international prices, Jagran notes. The report frames India's export halt not as a purely domestic decision but as a possible starting point for a wider global sugar squeeze.
