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Govt may consider import duty on sugar to save local mills

business Updated: Apr 26, 2010 21:17 IST
PTI
government

The government on Monday said it would consider imposing import duty on sugar after the current Parliament session to protect the domestic industry, which is facing a price slide.

Sugar prices have fallen by about 30 per cent in the last three months and duty on imports would help check flooding of the market with imported sweetener.

"We will review sugar production and consider imposing duty on sugar import after Parliament session," Food and Agriculture Minister Sharad Pawar told reporters in New Delhi.

Last month, industry had demanded that duty be imposed on sugar import amid a sharp fall in prices that hit their profit margins.

Since April 2009, the Centre had allowed duty-free import of raw and refined sugar to augment the domestic availability of sugar and check prices that were rising then. The country has imported over six million tonnes of sugar so far.

The imports were permitted as sugar production of India, the world's second largest producer but largest consumer, fell to 14.7 million tonnes in 2008-09 season (October-September) from 26.4 million tonnes in the previous season as against the demand of 23 MT. Duty-free import of sugar is allowed till December this year.

Meanwhile, sugar prices, which nearly touched Rs 50 a kg in January this year, have declined to Rs 35 a kg in the retail market of the national capital. Even the production outlook for the current season has improved from 16 million to 18 million tonnes.

Fall in prices have squeezed the margin of sugar mills, which are paying higher prices of sugarcane at about Rs 25 per kg due to shortage of cane this season.

Sugar industry, in its meeting with Pawar on March 31, had demanded that duty should be imposed on sugar imports to discourage inward shipments.

"If this is not done, India's sugarcane price payments will be adversely affected and farmers will shift to other remunerative crops," National Federation of Co-operative Sugar factories Ltd had said in its representation to the minister.

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