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India is taking initiative to open talk with neighbouring Sri Lanka and Bangladesh to seek lower import duties for its sugar exports to prevent a glut next season.
In the current 2017/18 season sugar mills in India, the world’s biggest consumer of the sweetener, is expected to produce just enough to meet its annual consumption of about 25 million tonnes.
However, output is expected to jump next season, which starts in October, raising the possibility of a drop in domestic prices.
Preparing for the potential glut, the Indian government will ask both Sri Lanka and Bangladesh to lower their import tariffs for sugar exports from India, said a government official.
About half a dozen Bangladesh refineries, which turn raw sugar into refined, or white, sugar could be interested in securing supplies from India, said Abinash Verma, director general of the Indian Sugar Mills Association (ISMA).
Bangladesh, which currently imports raw sugar from Brazil, the world’s biggest producer, will find it easier and more economical to import from neighbouring India, Verma said.
Sri Lanka, which allows duty-free sugar imports from Pakistan, could also be keen to import white sugar from India, he said.
“Between Sri Lanka and Bangladesh, India can look at exporting about 3 million tonnes, provided Colombo and Dhaka agree to India’s request of concessional tariffs,” Verma said.
India, the world’s biggest sugar producer behind Brazil, is likely to churn out more than 25.1 million tonnes in the current marketing season, according to the ISMA, reports, Reuters.