After a gap of almost 10 years, India may have to resort to sugar imports | Economy & Policy News

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 as consumption exceeded production in the 2025-26 season that started on October 1, 2025. 

Some experts said the decision to allow exports of 1.5-2.0 mt of sugar, when India was staring at a shortage based on “faulty” production estimates, is also to blame for the situation. 

In November 2025, the Centre first permitted exports of 1.5 mt of sugar; this was later raised to 2 mt. Of this, around 0.8 mt of sugar has been shipped out of the country before the exports were prohibited, according to industry estimates — almost the same quantity that India is now planning to allow mills to import in the form of raw sugar. 

“This clearly shows that someone somewhere was misleading the system into believing that the sugar fundamentals in the country were strong, while in reality production was not making up for consumption,” a senior industry executive said. 

He said this was because as late as February 2026, when the crushing season was already almost four to five months old, an additional export quota of 0.5 mt was permitted over and above the already allowed 1.5 mt. 

India, according to industry sources, last permitted raw sugar imports in the 2016-17 season. 

Based on some estimates, India’s actual net sugar production in the 2025-26 season is around 27.9 mt, after accounting for 2.4 mt of ethanol. The opening stock in 2025-26 was close to around 4.7 mt. 

This means total availability was somewhere around 32.6 mt. Sugar consumption this year is estimated at 28 mt. This leaves a closing stock of around 4.7 mt. 

But as soon as exports are incorporated into the picture, and 0.8 mt is added to consumption, closing stocks drop to 3.5-3.9 mt, leaving the country staring at a shortage. 

“Ideally, India should have normative closing sugar stocks of 6 mt, which is three months’ consumption, but the current situation shows that it could have lower than required stock levels at the start of the 2026-27 season from October 1, 2026,” another official remarked. 

That has necessitated the imports. 

Government sources said the government is believed to have advised mills to advance their crushing so that availability can be maintained, but that might not be enough to meet the gap, necessitating the imports. It has also tightened stock disclosure and reporting norms. 

A big question is whether a potential import of 1 mt of sugar will lead to a significant drop in ex-mill and wholesale rates.

Sources said that might not be the case, and prices at best might go down by ₹500 per quintal from their current levels.

“For the mills it is not such an unhappy situation as even if prices come down by ₹500 per quintal, they will still be more than the production cost of ₹4,200-4,300 per quintal. This should help them clear sugarcane dues faster,” said the executive mentioned above. 

Meanwhile, raw sugar prices in New York, the benchmark index, rose to a 14-month high of close to 17.47 cents per pound a few days back on the news of India planning imports after a gap of almost a decade. “This translates into a landed price (FOB) of around ₹3,840 per quintal at nil duty, which means that there should be considerable positive margin in importing,” the executive added.