Sweet Relief for Farmers: Govt Approves 1.5 MT Sugar Exports, Scraps Molasses Duty

The Union Government has greenlit the export of 1.5 million tonnes (MT) of sugar for the 2025–26 season, which began in October. This decision, announced by Food Minister Pralhad Joshi, is part of a broader effort to stabilize domestic sugar prices, support farmers, and manage surplus production. Alongside this, the government has also removed the 50% export duty on molasses, a byproduct of sugar refining used in ethanol production and animal feed.

The announcement was made in a letter to Karnataka Chief Minister Siddaramaiah, outlining steps taken to protect the interests of sugarcane growers. While the industry had requested an export quota of 2 MT, the approved 1.5 MT reflects a cautious approach amid fluctuating global prices and domestic supply considerations.

Key Highlights:

Export Quota Set at 1.5 MT:  
  The government will allow the export of 1.5 million tonnes of sugar for the 2025–26 season, slightly below the industry’s demand of 2 MT.

Molasses Duty Removed:  
  The 50% export duty on molasses has been lifted, potentially boosting ethanol production and related sectors.

Surplus Production Context:  
  India is expected to produce 34 million tonnes of sugar against a domestic demand of 28.5 million tonnes, leaving a surplus of 5.5 million tonnes.

Farmer-Centric Policy:  
  The move is aimed at protecting sugarcane farmers by ensuring better price realization and reducing stockpile pressure.

Industry Reaction:  
  While welcoming the decision, industry stakeholders have noted that the export cap is lower than expected, urging further flexibility as the season progresses.

Major Takeaway:  
The dual decision to permit sugar exports and remove molasses duty reflects a balanced policy approach—supporting farmers, easing inventory pressure, and encouraging industrial use of byproducts. It also signals the government’s intent to align agricultural output with global trade opportunities.

Final Thought:  
As India navigates the complexities of agricultural surplus and global market dynamics, such targeted interventions could pave the way for more sustainable and farmer-friendly trade policies.

Sources:  
Rediff Moneynews, Economic Times, ScanX News.