Global Sugar Market Trends: What Indian Manufacturers Must Know

Atul Chaturvedi, Executive Chairman, Shree Renuka Sugars, in a conversation with India Manufacturing Review, shared his views on how shifting global sugar prices and trade policies are influencing India's export competitiveness, the latest technological innovations that are transforming sugar processing, how India's ethanol blending programs and green energy initiatives can align with global decarburization trends and more.

How are shifting global sugar prices and trade policies influencing India's export competitiveness in 2025?

India has not historically been a structurally surplus sugar-producing country, and thus it has never been a player in global sugar exports. Over the past few years, India has emerged as a large swing factor in the global sugar market. A few years ago, India had developed significant sugar stocks and the government granted export subsidies and allowed excess sugar to be exported. After that, the production rebounded, and India’s sugar market is now structurally surplus. From a policy perspective, domestic market remains the foremost priority for the government. Ethanol production is the second primary key area and has become a major game changer in recent years. Thus, ethanol diversion is now the second most important after domestic supply.

Exports are the least prioritized and are only looked at after fulfilling domestic consumption and ethanol diversion targets. Last year, the government earmarked roughly one million tons of sugar for export, and around 0.7 million tons were actually shipped. However, in the context of the international market, export parity for Indian sugar does not favorably stand.

For mills located in Karnataka and Maharashtra, exports may still be marginally viable. For mills located in Uttar Pradesh, shipping sugar from northern India to port cities incurs high logistics costs that offset the value of trade, making the feasibility of exports very low. Thus, feasible exports are not an issue at the moment for Indian policymakers or the domestic sugar industry.

What are the latest technological innovations transforming sugar processing and refining efficiency worldwide?

The sugar sector has been actively utilizing technological and process advances to improve efficiency and sustainability. A significant advancement in several key aspects of production has emerged. The scraping and shredding processes have helped extract cane juice more effectively. Enzymatic clarification is also under investigation along with membrane-based micro-filtration. These innovations contribute to enhanced process efficiencies and the product quality.

The industry has also seen a major move towards automation and digitalization. AI-driven preventive maintenance has become a standard practice, and many mills are beginning to adopt this new technology to avoid downtime and provide more reliable operations. Furthermore, high-pressure boilers and bagasse drying systems are being utilized for better energy. Over years, the industry has also put the concept of zero discharge in practice to support the principle of a circular economy over the years. The zero-discharge method guarantees that no waste or effluent is expelled from the factory. Only finished products depart the factory, establishing sustainable and environmentally friendly production.

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How can Indian manufacturers build resilience against volatile global demand and fluctuating crop output?

At the global level, demand is relatively stable with an annual growth rate of approximately one percent. For Indian manufacturers, the most important thing is that domestic sugar is stable. The industry has a primary objective of meeting domestic requirements, while the secondary objective is to divert sugar to produce ethanol. After these needs have been met, the third priority is to consider exports. Thus, exports are not a primary goal for the sugar industry, but become a focus area when surplus sugar is available in the system.

Do you want to share some insights for our readers regarding the sugar manufacturing?

The sugar manufacturing industry continues to be a vital and viable sector. From the standpoint of the industry, one of the foremost industry priorities is the price differential between ethanol produced from sugarcane and produced from maize. Presently, oil marketing companies pay around ₹72 per litre for maize-based ethanol, while sugarcane-based ethanol is priced at around ₹60–65 per litre. Bridging this gap has been a key demand of the sugar industry.

It is also vital to adjust the price of ethanol produced from the sugar industry. The sugar sector has a lot of regulation. Over the last two to three years, India have seen the price for cane go up significantly, estimated at around 18–20 percent, whereas the price for ethanol has stayed the same. The government also set the minimum selling price of sugar at approximately ₹31 per kg about five to seven years ago. The minimum selling price has never been reinstated, despite many increases in the fair remunerative price, or FRP for farmers.

The industry has consistently requested that the minimum selling price be aligned with the FRP increases to create a systematic and institutionalized pricing mechanism. Both initiatives - the review of ethanol pricing and the revision of the minimum selling price, continue to be top priorities for the industry and are being actively requested from the government.

About the Author

Atul Chaturvedi is a veteran in the Vegetable Oil/ Oil seeds and Agro Business of the Country. He has more than four decades of successful and varied general and strategic management experience in the field of Manufacturing, Trading and Agri Infrastructure Development.