Lower sugar production forecast in the ongoing 2024-25 sugar season has prompted the government to approve export of 1 million tonnes of the commodity after a year’s interval.

An export ban was imposed in the 2023-24 sugar season due to domestic supply concerns. The decision reversal for the current season brings relief to sugar mills and millions of farmers, ensuring timely payments to them.

Following the latest decision, domestic sugar prices have surged by Rs 200 per quintal.

Writing on social media platform X, Union Minister of Food, Consumer Affairs, and Public Distribution, Pralhad Joshi said that the central government has approved the export of 1 million tonnes of sugar for the 2024-25 season. This move aims to stabilize sugar prices while benefiting 50 million farmer families and 500,000 workers. Additionally, he said, the decision will bolster the sugar industry.

After the complete export ban in the 2023-24 season, the sugar industry had been lobbying for a reversal. The industry argued that despite lower production forecasts for the current season, the surplus stock from the previous season would prevent supply disruptions. With the ban now lifted, sugar mills can export their surpluses to earn more revenue.

The Food Ministry has allocated a uniform export quota of 3.174% of the mills’ three-year average production of sugar. All grades of sugar under this allocation can be exported until September 30, 2025. Mills also have the option to surrender their export quota by March 31st or convert it into the domestic monthly release quantities.

Deepak Ballani, Director General of the Indian Sugar and Bio-Energy Manufacturers Association (ISMA), welcomed the decision, acknowledging the relief it brings to sugar mills.

India’s sugar production is estimated to fall to 27 million tonnes in the ongoing 2024-25 crushing season, compared to 32 million tonnes output in 2023-24. As of January 15, total sugar production stood at 13 million tonnes, marking a 13.66% decline compared to the same period last year.

Diseases and inclement weather conditions impacted sugarcane crops, reducing sugar recovery rates and production estimates. Cooperative sugar mills account for around 30% of the country’s total sugar production.