India Looks to China for Bailing Out its Sugar Industry

Excess production has led to a steady decline in sugar prices, affecting the financial health of sugar mills that are facing a huge accumulation of arrears to be paid to farmers. Meanwhile, cash-strapped farmers have launched a protest against the government for failing to provide them loan waivers.

New Delhi (Sputnik): India is expecting some relief on import tariff form China so that it can export the surplus of raw sugar from the upcoming season's harvest. Industry sources told Sputnik that there is a positive indication from the Chinese side for the import of raw sugar and the issue may be discussed in next trade talks with China.

"We are expecting some relief on import tariff from China so that we can export 1.5-2 ton of raw sugar to China," a government official told Sputnik.

READ MORE: India Mulls 25% Safeguard Duty on Chinese, Malaysian Solar Panels

The official added that an Indian trade delegation is set to visit Beijing on Wednesday and Thursday to explore the export market for sugar, soya and non-basmati rice.

"We are hopeful about the export of sugar to China. We may go for a government to government deal," the official stated.

In the financial year 2017-18 (April 2017-March 2018) alone, excessive production resulted in the accumulation of cane price arrears to the tune of $3.5 billion which the farmers have yet to receive. In the upcoming harvest season too, cane production is expected to be at least 7 million ton more than the projected domestic demand. 

 "The sugar production during current sugar season (Oct, 17-Sep,-18) is estimated to be about 32.2 million tons as against 20.27 million tons during previous sugar season," CR Chaudhary, India's Minister of state for food and public distribution said on Tuesday in Parliament.

READ MORE: US-China Trade Tiff a Golden Opportunity for India — Minister

India is expecting to export at least 2-2.5 ton sugar to Bangladesh. While Indonesia has an annual requirement of raw sugar around of 3.5-4.0 million, it wants India to cut import tariff on palm oil before starting negotiation on the export of sugar. Malaysia has also proposed similar conditions for buying Indian sugar.