Indonesia is interested in buying sugar from India but wants the latter to cut import duty on refined palm oil and the sweetener substantially to 45 per cent and 5 per cent, respectively, according to sources.

An Indian delegation is scheduled to visit Indonesia this week to negotiate trade between the two nations for these two commodities.

While India is the world’s largest sugar producer with huge quantity of exportable surplus, Indonesia is a major producer of edible oils, particularly palm.

According to sources, India is in talks with various countries, including China and Indonesia, to export surplus sugar and help mills clear cane arrears to farmers.

The Indonesian government is believed to have communicated that it was “not averse” to a bilateral arrangement with India on palm oil and sugar, sources said.

Output falls

The country’s sugar production fell 15 per cent to 1.16 million tonnes till November 15 of the current marketing year that started last month as many mills have not yet started crushing operations in this season, industry body Isma said on Monday.

The Indian Sugar Mills Association (Isma) had last month forecast that the production in the current 2018-19 marketing year (October-September) may decline to 31.5 million tonnes (mt) from a record 32.5mt in the previous year.

Isma had in July projected 35.5mt production for 2018-19 but revised its estimates downward as the sugarcane crop in the three main growing states of Uttar Pradesh, Maharashtra and Karnataka, which contribute around 80 per cent to the total sugar output, has been impacted adversely.