Chinese delegation visits India to firm up long term pact for sugar import

The Chinese delegation is exploring ways of firming up long-term arrangements for import of sugar from India. A high-level delegation from the Chinese sugar industry visited Delhi, Uttar Pradesh and Maharashtra, two states which account for the bulk of production in the country.

India had earlier asked China to consider releasing its raw sugar export quota for 2019 earlier than January. The Chinese government normally releases sugar quota for January-June in the middle of January. The reasoning behind this is by then mills would start producing white sugar and switching to raw sugar would be difficult, said an official.

Raw sugar is the second item that China agreed to import from India this year after starting shipments of non-basmati Rice. A contract for exporting 15,000 tonnes of raw sugar has been entered into by the Indian sugar Mills Association (ISMA) and China’s COFCO. The sugar industry is hopeful of gradually raising exports to 2 million tonnes per year to China.

The Chinese delegation was satisfied with the information about practices concerning production, processing, storage and transport of sugar in India.

As of 1 August this year, China has introduced a 90 per cent import tariff on all out-of-quota (OOQ) sugar. This is a change from the previous exemption given to origins that export less than a total of 3 per cent of OOQ sugar into China.

Last year, as part of WTO safeguard measures, China imposed an additional 45 per cent tariff on OOQ sugar imports that total more than 3 per cent of the total OOQ. sugar imports from origins that total less than 3 per cent would be exempted from this addition and only subjected to a 50 per cent import tariff.

However, due to the plunge in domestic sugar prices this year, the Chinese government has decided to extend a 90 per cent import tariff on all OOQ sugar from all origins, as part of its protective measures of domestic sugar mills.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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