The government’s new sweetener for the Sugar sector could well be a turning point for the industry. The government-to-government level trade deal to export sugar to China will be a game changer for the beleaguered sector. The government projects sugar exports from India to China touching 2 million tonne per annum (mtpa) from next year. The first baby step towards that goal has been taken with the signing of a contract for exporting 15,000 tonne of raw sugar by Indian Sugar Mills Association (ISMA) and COFCO, a Chinese government-run company.

India’s sugar exports have over the years been company-specific, with help from ISMA. The government was mostly missing in this export push initiative. Take the case of Bangladesh, a country surrounded by India from three sides. Bangladesh needs 2.5-3 mtpa of raw sugar, but rather than purchasing it from India it goes halfway around the world to Brazil to buy it.

China’s sugar production is around 10.5 mtpa, while it consumes 15 mtpa. The country issues a quota, twice a year, to traders to import sugar from the world market, but here too the Indian sugar industry has not done much to fill this requirement.

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