Central Government Imposes Immediate Ban on Sugar Exports to Stabilize Domestic Prices

In a strategic move to bolster domestic supply and curb rising food inflation, the Central Government has announced an immediate ban on sugar exports effective from May 13 through September 30

New Delhi | May 15, 2026: The Directorate General of Foreign Trade (DGFT) issued a formal notification late Monday, halting overseas shipments of sugar with immediate effect. The decision aims to ensure sufficient availability for the local market and prevent price volatility during the upcoming months. However, the government has provided specific exemptions: exports to the European Union and the USA under CXL and TRQ quotas will continue, as will “government-to-government” deals and shipments already in the process of actual loading.

For the 2025-26 marketing year, the Ministry of Food had initially permitted the export of 1.5 million tonnes, later adding a small additional quota. Despite this, the industry estimates that only about 7.5 to 8 lakh tonnes were actually shipped. According to the Indian Sugar Mills Association (ISMA), production in Maharashtra and Karnataka surged by 7.32% this season, reaching 27.52 million tonnes by April. ISMA estimates total production (excluding ethanol diversion) will reach 29.3 million tonnes, significantly higher than the previous year’s 26.12 million tonnes.

The decision has sparked a sharp backlash from political and industry leaders in Maharashtra. Former MP Raju Shetti criticized the move, calling it “detrimental to farmers,” arguing that creating market instability when international prices are already low will hit farmers’ income. Similarly, MLA Jayant Patil urged the government to reconsider, stating that sugar mills are already burdened by high Fair and Remunerative Prices (FRP) and surplus stocks. “Storing excess sugar in godowns instead of earning foreign exchange is a flawed policy,” Patil remarked.

Industry experts, including Vijay Autade, former MD of Shahu Cooperative Sugar Factory, warned that the sudden ban would worsen the financial crisis for mills. While the government appears concerned about potential production drops due to erratic rainfall forecasts, experts argue that trapping nearly 12 lakh tonnes of planned exports in the domestic market will lead to a liquidity crunch and a massive carryover stock, further straining the sugar industry’s economic health.

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