Indian sugar mills have re-entered the export market, locking in around 100,000 metric tons of shipments over the past week, as a sharp depreciation in the rupee and a surge in global sugar prices improved the viability of overseas sales, according to trade sources.
The renewed activity comes after weeks of subdued trading, with dealers noting that the changing geopolitical landscape—particularly the Middle East conflict—has driven up crude oil prices, raising expectations of higher ethanol production in Brazil and tightening global sugar supply.
“The war has suddenly changed everything. It has pushed global sugar prices higher in anticipation of increased ethanol demand and dragged the rupee to a record low,” a Mumbai-based dealer said, adding that export deals are now gaining momentum.
Indian sugar is currently being offered at about $450 per ton on a free-on-board (FOB) basis, with buyers from Sri Lanka and several African nations—including Djibouti, Tanzania, and Somalia—booking shipments for April and May.
So far, mills have contracted exports of approximately 550,000 tons for the current marketing season ending in September. Total exports are expected to rise to around 1.5 million tons, with demand likely to pick up further from markets such as Afghanistan, Kazakhstan, Uzbekistan, and the Middle East once geopolitical tensions ease.
In February, India increased its sugar export quota to 2 million tons, adding 500,000 tons to the earlier approved 1.5 million tons. However, mills have applied for only a fraction of the additional allocation, leaving much of it unutilized.
Despite strong global demand, logistical challenges continue to weigh on export volumes. Limited container availability and rising freight rates remain key constraints, although Indian sugar retains a freight advantage in nearby Asian markets compared to supplies from Brazil.
A weaker rupee—down about 4.5% so far in 2026 to a record low—has further enhanced export competitiveness, enabling mills to secure better realizations overseas than in the domestic market. Meanwhile, Brazil’s currency has strengthened, adding to India’s relative advantage in global trade.