The government has permitted export of 1,239 tonnes raw sugar under its tariff-rate quota (TRQ) to the US, which enables shipments to enjoy relatively low tariff. TRQ is a quota for a volume of exports that enter the US at relatively low tariffs. After the quota is reached, a higher tariff applies on additional imports.
“Additional quantity of 1,239 tonne of raw cane sugar to be exported to USA under TRQ up to September 30, 2019 has been notified,” Directorate General of Foreign Trade (DGFT) said in a public notice. The country enjoys duty-free sugar exports to the US for up to 10,000 tonnes annually under preferential quota arrangement.
India, the world’s largest consumer of sugar, has a preferential quota arrangement for sugar export with the European Union as well.
Last year, India’s Commerce Ministry had said that Indian Sugar Mills Association (ISMA) had been entered into a contract to export 50,000 tonnes of sugar with Chinese public sector company COFCO.
In a boost to sugar mills sitting on surplus stocks, India was supposed to start raw sugar exports to China in early 2019, and to Indonesia and Malaysia as well.
Raw sugar is the second product after non-basmati rice that China will import from India. It was a move to reduce the $60 billion trade deficit that China has with India.
India is the world’s largest sugar producer with a production exceeding 32 million tonnes a year. 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.
In June 2018, the Indian embassy in Beijing hosted a seminar pitching sugar exports, with 25 Chinese companies in attendance, including COFCO Sugar. Representatives from industry lobbyist ISMA had made presentations to promote the Indian pitch.