Government Permits 1.5 MT Sugar Export in 2025-26, Removes Molasses Export Duty; Sugar Stocks in Focus

The Indian government has approved the export of 1.5 million tonnes of sugar for the 2025-26 season starting in October, while simultaneously removing the 50% export duty on molasses. The move targets surplus stock management and supports sugarcane farmers.

Export Policy Targets Surplus Sugar Stocks

On November 7, 2025, Food Minister Pralhad Joshi informed Karnataka Chief Minister Siddaramaiah about the Centre's decision to allow 1.5 MT of sugar exports in the 2025-26 season. This allocation comes in response to an expected surge in sugar production, projected at 34 MT, against an annual domestic demand of 28.5 MT. With excess stock piling up due to lower ethanol diversion, this export boost offers a timely relief for industry stakeholders.

The move is likely to positively impact sugar-related stocks such as Balrampur Chini, Triveni Engineering, and Dhampur Sugar Mills.

50% Molasses Export Duty Removed

In a related measure, the Union Government has removed the 50% export duty previously levied on molasses. This is expected to ease the logistical and financial burden on sugar mills, as they now have smoother avenues to dispose of by-products. The decision also encourages global competitiveness for molasses-based products.

Industry Expectations vs Government Allocation

The sugar industry had requested export permission for 2 MT. However, permission has been granted for 1.5 MT only, pointing to a cautious but progressive policy outlook aimed at balancing domestic supply while creating export opportunities. In the previous 2024-25 season, India exported 8,00,000 tonnes against an allocated quota of 1 MT.

Read More: Govt Relaxes Rules on Ethanol Production, But Only One-Third Comes from Sugar!

Shortfall in Ethanol Blending Impacts Stocks

During the 2024-25 period, only 3.4 MT of sugar was diverted for ethanol manufacturing, well below the 4.5 MT projection. As a result, higher-than-expected opening inventories led the government to expedite export policies to maintain supply-demand balance while preventing a fall in sugarcane procurement prices.

Impact on Sugar Stocks

Sugar stocks are expected to respond positively to the twin announcements of export allowance and duty relaxation. Companies like Shree Renuka Sugars, Dalmia Bharat Sugar, and EID Parry may also witness increased trading volume due to improved industry outlook and government backing.

Conclusion

By permitting 1.5 MT sugar export and eliminating the export duty on molasses, the government has provided critical support to the sugar sector and sugarcane farmers. These strategic moves are set to ease stock pressure, boost exports, and maintain price stability in domestic markets.

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