India allows early sugar sales to avoid imports as prices hit record

India authorised mills to crush sugarcane early in the 2026-27 season, letting them sell the output in October and November, the Directorate of Sugar and Vegetable Oils said in an August 14 notification. The move aims to avoid sugar imports.

Dilip Patil, managing director of Samarth SSK and co-chair of the Sugar Bioenergy Forum, said the decision supports market stability by regulating orderly sugar releases. "By enabling mills to monetise early-season production without creating artificial shortages, the framework also helps maintain adequate domestic availability, thereby lessening the likelihood of having to resort to imports," Patil said.

The measure will help cool prices, said Deepak Ballani, director-general of the Indian Sugar and Bio-energy Manufacturers Association. "To a large extent, this decision along with other measures taken by the Government will help cool down or stabilise sugar prices," he said.

Retail sugar in New Delhi hit a record ₹55.70 a kg on Thursday, up nearly 10% from a week ago and more than 30% since June. October raw sugar futures on the InterContinental Exchange in New York settled at 17.67 US cents a pound, an 18-month high. White sugar in London traded at $549.90 a tonne. Raw sugar traded near 14 cents a pound and white sugar at $411 before the current rally.

Separately, the government imposed stock limits on bulk buyers using more than 10 tonnes a month, effective September 1 through November 30. The rule covers confectioners, soft drink manufacturers, food processors, and other institutional buyers, who cannot hold more than 15 days of stock. Patil said the landed cost of imported sugar would be ₹58-60 a kg.

Ending stocks for the current season ending September are projected at 3.5 million tonnes, down from 4.9 million last year. Net production is pegged at 28 million tonnes against consumption of 29 million tonnes. The government allocated 24.55 million tonnes for the October 2025-August 2026 period, leaving about 1.5 million tonnes for November if October allocations are fully used. Mills starting early can cover a gap of 0.9-1 million tonnes, industry sources said.

Rahil Shaikh, founder and managing director of MEIR Commodities, said the situation looks tight. "The government should consider allowing at least 1 million tonnes of either raw or white sugar imports. It should stipulate that it should reach the retail shelf in 30 days. It will help," he said.

The domestic industry is not united on imports. Sugar associations including ISMA and the National Federation of Cooperative Sugar Factories have sought compensation for early crushing, citing a potential 2% loss in recovery. A source familiar with industry discussions said the August 14 notification is sufficient compensation. Another source said the government has not decided on imports.

Farmers have planted sugarcane on 5.83 million hectares this season, marginally below last year's 5.86 million. The U.S. Department of Agriculture expects Indian production to recover to around 33 million tonnes, including ethanol diversion, for 2026-27. The government has not announced an import decision.