[ad_1]
The ongoing trade war between China and the United States is pushing Beijing to strengthen ties with neighboring India.
Chinese refiners plan to buy unprecedented quantities of Indian raw sugar. A delegation will visit the South Asian country next month to meet with factory officials and inspect logistical infrastructure, according to an Indian official. Refiners can buy sugar "if prices are good enough," said Liu Hande, vice president of the China Sugar Association.
Potential sales arise in the context of China's tariff war, which is pushing China to strengthen its links with other countries. The moment could not be better chosen for India, where record production is expected to boost domestic stocks. A sugar deal would be the second agreement of its kind concluded recently after China announced its intention to import non-basmati rice, said the Indian Ministry of Commerce.
"China must be open-minded towards its trading partners and will probably buy a symbolic amount in a demonstration of goodwill in the light of its trade with the United States", said Zhan Xiao, fund manager at the Shanghai Buyun Investment Co.
The volume might not be as large as that expected by India, especially because of the large Chinese state stocks, estimated at 7 million of tons, said Zhan, of Shanghai Buyun. Liu of the China Sugar Association agrees, adding that there was a chance that the government would not buy Indian sugar because the stocks "are still quite high", and it seeks to reduce stocks, not to increase them, he said.
Bumper Harvest
China's past actions indicate that Zhan and Liu may be right. The country imposed high tariffs on imports last May to protect its local industry. Currently, sugar imports above annual quotas are taxed at 90%.
"We do not know how many import quotas would be issued, or whether China and India sign an agreement on low tariffs on imports," said Liu of China Sugar Association.
Despite tariffs, India is strongly encouraged to become a regular supplier to China. According to the US Department of Agriculture, a record crop is expected to move India over Brazil and become the world's largest sugar producer for 16 years. With an overabundance and sugar reference futures falling to the bottom of the decade this year, the Indian government is providing financial support to factories to boost sales overseas.
India plans to export 2 million tons of raw sugar to China, starting in 2019, said the Ministry of Commerce. An Indian entity has already signed a contract with Cofco International Ltd. for export of 50,000 tonnes, and the country is well positioned to become a "significant" exporter to China, the government said.
"We want China to issue import permits immediately to its refiners," said Prakash Naiknavare, chief executive officer of the National Federation of Sugar Manufacturing Co-operatives Ltd.
[ad_2]
Source link
