• In a boost to sugar mills sitting on surplus stocks, India will start raw sugar exports to China in early 2019, and is in talks to finalise exports to Indonesia and Malaysia as well.
  • The Commerce Ministry said the first contract to export 50,000 tonnes of sugar had been entered into by the Indian Sugar Mills Association (ISMA) and Chinese public sector company COFCO.
  • ISMA initially denied there was any contract to export sugar to China, then reversed its position and said it is making all efforts to export maximum possible sugar to China, but still denied any direct contract between ISMA and COFCO.
  • Government and sugar industry officials have been engaged in negotiations with Chinese government officials and companies for several months
  • Raw sugar is the second product after non-basmati rice that China will import from India.
  • It is a move to reduce the $60 billion trade deficit that China has with India.
  • India’s exports to China in 2017-18 amounted to $33 billion while imports from China stood at $76.2 billion.
  • India is the world’s largest sugar producer with a production of 32 million tonnes in 2018. However, domestic consumption is only around 25 million tonnes, sugar producers have been left with large surplus stocks, driving down prices and affecting both mills and sugarcane farmers.
  • Both government and industry have been making efforts to increase exports in a bid to reduce surplus stocks.