The government is considering a proposal to allow sugar mills to export to China under the preferential quota system, under which exports are permitted at low tariffs. The government is already selling sugar to the US and EU markets under the preferential quota system and is looking to explore the same with China, which imports about 3-4 lakh tonnes of sugar annually from India. The move is aimed at liquidating the surplus stock of the sweetener.
Through the preferential quota system, India exports 10,000 tonnes of white sugar to the EU and 8,100 tonnes to the US. After the quota is reached, a higher tariff is applied on additional exports. The government is also in discussions with other countries like Canada, Indonesia and Malaysia to know if there is a possibility to barter sugar for vegetable oils and pulses in those countries. Food Minister Ram Vilas Paswan had said that the government is considering barter trade of sugar against import of farm items like pulses from some countries.
At present export through normal route don’t looks feasible due to decline in global prices; the government is trying all options to push export of 4 million tonnes of surplus sugar. Sugar output has exceeded domestic demand for the last five years and the trend is expected to continue in this marketing year (October-September) too. The country is estimated to produce 28 million tonne sugar in 2014-15 marketing year, against annual demand of 24.8 million tonne.