India is all set to export raw sugar for the first time. The Indian Sugar Exim Corporation has signed a deal with Al Khaleej refinery of Dubai to export raw sugar.

The deal is for around two lakh tonnes of raw sugar at the price at $270 a tonne c&f. Indian traders put the deal at Rs 930 a quintal.

S L Jain, Director-General of the Indian Sugar Mills Association said that raw sugar exports would be the only saviour for the Indian sugar industry.

He said the delivery of raw sugar would be from the new season beginning October.

Jain said only seven lakh tonnes of the total 16-17 lakh (1.6-1.7 million) tonnes of white sugar cleared for exports had been shipped. "That is why we feel raw sugar exports will save us," he said.

A feature of the sales by ISEC is that it has been made direct to the refinery. "No trader has been involved in this deal," Jain pointed out.

He added that the exports are being made under open general licence. The exports also come on the heels of the Centre clarifying that raw sugar shipments would be eligible for the Rs 1,350 a tonne subsidy.

Analysts said selling raw sugar makes sense since the market for white sugar in the country is limited, especially in view of mounting stocks. Carryover stocks at the end of the current season are projected at over 100 lakh tonnes.

Raw sugar, which is light brown in colour, undergoes minimum processing.

ISEC is a body floated jointly by the private sector ISMA and National Federation of Sugar Cooperative Factories Ltd. It undertakes exports on behalf of the sugar industry.