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india plans to extend its sugar export ban for a second consecutive year to cope with the prospect of falling sugar production in the country, according to government sources.

india also plans to increase the price oil companies pay for ethanol from sugar mills as part of efforts to boost supplies of the biofuel, the sources said.

india is the world's largest sugar producer and the second-largest exporter after brazil. india's possible move will further squeeze global supply and push global sugar prices higher again.

this year, abnormal climate events have occurred frequently around the world, with the impact of the el nino phenomenon being particularly significant. many south american countries are facing a drought crisis, which will lead to a decrease in brazil's supply.

"based on the current crop situation, the government believes there is not enough sugar available for export," an indian government source said.

“after meeting local sugar demand, our next focus is ethanol blending and we need more sugarcane to meet the ethanol blending target.”

in order to reduce carbon emissions, india plans to increase the proportion of ethanol in gasoline to 20% by 2025-2026, compared with the current proportion of about 13%-14%. this is one of the measures taken by the indian government to combat climate change and reduce greenhouse gas emissions.

at the same time, many indian sugar mills (such as eid-parry, bajaj hindusthan, dwarikesh sugar, etc.) have increased their ethanol production capacity. it is reported that the indian government is also considering raising the ethanol purchase price by more than 5% in november.

the indian government recently said in a notification that from the new marketing year starting november 1, india will allow sugar mills to use sugarcane juice or syrup to produce ethanol.

india’s plans to extend a ban on sugar exports and raise domestic ethanol prices have not been previously reported, with both measures likely to be announced later this month.

india's sugar production is expected to fall to 32 million tonnes in 2024-25, mainly due to the adverse impact of uneven rainfall in maharashtra and karnataka last year. these regions are the main sugar producing areas in india, and insufficient rainfall has affected the growth and sugar accumulation of sugarcane.

“with lower sugar production expected in brazil in 2025, the world needs indian sugar exports. without indian exports, global sugar prices will rise further," said a mumbai-based dealer with a global trading firm.