LPG crisis may reduce India's sugar consumption by 400K tonnes: ISMA chief

Centre rules out banning sugar exports; says no proposal to lower edible oil import duties

India’s sugar consumption is projected to drop by almost 400,000 tonnes in the 2025-26 season to 27.7 million tonnes. This is because the LPG crisis due to the war in West Asia and a cooler-than-usual March cut demand, the head of a leading trade body said today.

 

“From October 2025 to February 2026, sugar despatches were higher by around 60,000 tonnes compared to the same period last year, but the situation shifted as the West Asia conflict escalated in March,” Indian Sugar and Bio-energy Manufacturers Association (ISMA) Director General Deepak Ballani told reporters on the sidelines of the 'ISMA Sugar NXT 2026’ conference here today. Consumption stood at around 28.1 million tonnes in the 2024-25 season.

   

His comments came even as Food Secretary Sanjeev Chopra, who was also present at the conference, ruled out any proposal to ban sugar exports to boost domestic supply. He also said the government is considering the industry's demand to increase the minimum selling price of the sweetener.

 

"Regarding sugar exports, the government has approved the export of around 1.5 million tonnes. Some quantities have been contracted, but parity with international prices remains an issue. However, since the West Asia crisis, there has been some improvement in global pricing. Nonetheless, I think that meeting the full approved quota will be a challenge. If exports do not happen, that quantity will remain as closing stock, which will then give the industry flexibility to push more sugar toward the Ethanol Blending Programme," Chopra said.

 

The secretary said sugar prices have remained stable and rates are unlikely to rise going forward due to sufficient domestic supply.

 

He also informed that the government has set up a committee of officials to consider ways to utilise surplus ethanol manufacturing capacity, including increasing the blending of ethanol with petrol from the current 20 per cent.

 

Chopra said the government is also favourably considering another demand from the sugar sector: using ethanol-based stoves to provide another avenue for utilising the surplus capacity.

 

He also said there is no proposal to reduce import duties on edible oils. ISMA had also scaled down net sugar production from 29.2 million tonnes to 28.5 million tonnes due to a drop in recovery rates. The government too has brought down its production estimate for the 2026-27 season.

 

The drop in demand has not only impacted sugar; news agency Reuters said that even edible oil makers are seeing a fall in consumption due to the LPG crisis.

 

BV Mehta, executive director of the Solvent Extractors’ Association of India, said that India’s edible oil imports fell nearly 9 per cent in March from the previous month to 1.2 million tonnes, as roadside eateries and restaurants reduced their consumption due to the LPG shortage.