Govt extends duty-free raw sugar import deadline to Dec 31 amid lower output

The government has extended the deadline for duty-free imports of up to 10 lakh tonnes of raw sugar by two months till December 31, 2026, amid efforts to augment domestic supplies and keep prices in check.

The extension comes at a time when domestic sugar production estimates for the 2025-26 marketing year (October-September) have been lowered to 306 lakh tonnes from the earlier forecast of 343 lakh tonnes.

Annual domestic sugar demand is estimated at 280-285 lakh tonnes.

According to industry data, around 2.6 lakh tonnes of raw sugar has been imported so far under the duty-free window.

Industry sources said imports have remained subdued due to a lack of price parity, making overseas supplies commercially unviable at prevailing prices.

The extension is aimed at ensuring that imports can take place whenever international prices ease sufficiently to make shipments viable, they said.

Meanwhile, state-run oil marketing companies (OMCs) have excluded ethanol produced from sugarcane juice, sugar syrup and B-heavy molasses from their latest procurement tender for the 2026-27 supply year.

The tender, issued by Bharat Petroleum Corporation Ltd (BPCL) on October 16 on behalf of the OMCs, seeks bids for around 11 billion litres of ethanol for the supply year from November 2026 to October 2027, to meet the requirement of blending 20% ethanol with petrol.

"The Government of India has issued directions that sugar diversion for ethanol be reduced to zero for ethanol supply year 2026-27," the tender document said.

"No offers have been sought for ethanol produced from sugarcane juice, sugar or sugar syrup and B-heavy molasses in this quantity bid tender," it added.

The tender allows bids for ethanol produced from maize, broken rice, surplus rice procured by the Food Corporation of India (FCI) and C-heavy molasses.

It has also reduced the procurement price incentive for maize-based ethanol, lowering the price to ₹68.86 per litre from ₹71.86 per litre.

The move marks a shift in feedstock sourcing for India's ethanol-blended petrol programme, which has relied on both grain-based and sugarcane-based ethanol to reduce crude oil imports and cut vehicle emissions.

India is the world's largest sugar consumer, and the diversion of sugarcane and sugar for ethanol production can compete with supplies available for food consumption, particularly in years of lower output.

With sugar-based ethanol excluded from the latest procurement cycle, grain-based ethanol production is likely to assume greater importance in meeting blending requirements.