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The former world's second-largest sugar exporting country is

As the world's second-largest sugar exporting country in the past, India is facing pressure to reduce sugar production. According to a recent report by India Today, the increasing El Ni ñ o phenomenon in the Pacific may lead to severe seasonal rain and rain shortages in India, resulting in a possible decrease in sugarcane yields in major sugar producing states and a reduction in India's total sugar production. In addition, the increasing demand for ethanol in the Indian market has led to more sugarcane being converted to renewable energy production such as ethanol, which has also squeezed sugar supply.
 
The Japan Times commented that the dual pressure mentioned above is expected to prevent millions of tons of sugar from entering the global market, and India's long-term absence from the export market is reshaping the global sugar trade pattern.
 
There may be very little sugar left for export in the future
 
The Nikkei Asian Review reported on the 6th that India's sugar industry may withdraw from exports and shift towards ethanol production. The report quoted multiple industry insiders as saying that there may be very little sugar available for export in at least the next few production seasons. The key factor behind this transformation is that India is expanding ethanol production, and biofuel policies and climate pressures are reshaping the sugar industry landscape of this former world's second-largest sugar exporting country.
 
According to reports, some sugar mill operators in the northern Indian state of Uttar Pradesh have stated that their factories are increasingly focused on ethanol production as domestic demand for biofuels grows. India is pushing to increase the ethanol blending ratio in gasoline and adopt flexible fuel vehicles more widely to reduce dependence on expensive imported crude oil.
 
On the 9th, the British Broadcasting Corporation (BBC) reported that India has been blending ethanol into gasoline since the early 21st century and has steadily increased the blending ratio since then. Analysis shows that India is the world's largest two wheeler market and the third largest automobile market, with the majority of its crude oil consumption relying on imports. During the US Israel Iran conflict, fluctuations in the global oil market prompted India to accelerate its ethanol blending and flexible fuel plans to reduce its dependence on imported crude oil.
 
According to Indian media reports, in April this year, India designated E20 (gasoline containing 20% ethanol) as the standard fuel for every gas station. Recently, the production tax on high proportion ethanol blended gasoline has been cancelled, and fuel containing up to 85% ethanol has been launched. The market demand for ethanol has increased significantly.
 
The Nikkei Asian Review quoted Rohin Kumar, project director of the Palkiya Foundation, a non-profit climate organization in India, as saying that India's large conglomerates are gradually expanding their business from traditional sugar production to ethanol and sustainable aviation fuels, fundamentally changing the business model of the industry. He said, "Large integrated enterprises will continue to integrate around ethanol and other biofuel businesses, while smaller sugar factories may struggle to keep up
 
Reduced from second to seventh
 
Ethanol can be extracted from crops such as sugarcane and corn. According to an analysis by The Japan Times, the industry expects that with the increase in ethanol blending ratio in gasoline and the popularity of flexible fuel vehicles, India's ethanol demand may more than double from the current 12 billion to 13 billion liters by 2039-2040, reaching about 30 billion liters. The general manager of Natural Sugar in Maharashtra, Tang Barre, stated that future government policies may prioritize supporting ethanol production over sugar exports.
 
Under the dual pressure of continuous diversion of sugarcane raw materials in ethanol production and extreme weather leading to reduced sugar production, the Indian government announced on May 13 this year that sugar exports would be banned from that day until September 30, prioritizing domestic supply and stable prices. Whether exports will resume in the future will depend on the supply and demand and surplus prospects of the subsequent production seasons.
 
India's sugar exports have been ranked second in the world for many years, second only to Brazil. According to Nikkei Asia Review, its global export share was close to 11% in 2022, but since then, its export value has shrunk by about one-third annually for two consecutive years, causing this South Asian exporting country's ranking to drop to seventh in the world by 2024.
 
In recent years, India's sugar exports have been a major volatile factor in the global market. Bloomberg reported that due to poor harvests in 2022-2023, India has begun to restrict exports and implement annual export quotas.
 
According to data released by the Indian government, India's sugar exports have significantly decreased in recent years, from a peak of 11 million tons in the 2021-2022 sugar production year to 6.3 million tons in the 2022-2023 sugar production year; Plummeting to 100000 tons in 2023-2024; From 2024 to 2025, there will be a slight rebound, rising to 900000 tons, but still far below the previous level.
 
Buyers will turn to Brazil and Thailand
 
Reuters commented that India may be largely absent from the global sugar export market in the coming years. Due to the severe El Ni ñ o phenomenon and increasing demand for ethanol, not only will India's exports disappear, but India may also need to import in the coming years, "said Mohan Narang, director of K.S. Commodities, a trading company in New Delhi.
 
Kumar predicts that sugar export restrictions in India will become more widespread as "more and more sugarcane is being converted to ethanol production, leaving less sugar for the international market". Kumar believes that in five years, what we may see is no longer a traditional sugar industry, but an industry centered around biofuels and by-products, while also considering sugar production.
 
According to data released by the General Administration of Customs of China, from January to May 2026, China imported a total of 860000 tons of sugar, mainly from countries such as Brazil and El Salvador, and India was not among the main source countries. As India's exports continue to be restricted, the international market is turning its attention to sugar producing countries such as Brazil and Thailand. According to Indian media analysis, as shipments from India are restricted, it is expected that buyers from Asia and Africa will turn to Brazil and Thailand for supply.
 
(Editor in charge: Zhang Chong)

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