The price of sugar in the Indian and global markets is low, for various reasons.

At home, with the government having allowed dutyfree import of 500,000 tonnes of raw sugar, the market assumes a commitment to keeping prices in check. The wholesale price has fallen by ~1 kg after the import permission was announced.

Abroad, prices have fallen sharply, with the benchmark Variety no 11’s contract price down 30 per cent in a little less than four months. This makes import viable even at a 40 per cent duty.

Domestic production is estimated at 25 per cent more or around 25 million tonnes in the current sugar year — ending September 30 — against 20.3 million tonnes in the previous year, said an industry executive.

T Sarita Reddy, president, Indian Sugar Mills Association (Isma), said: “We have represented that the import duty be raised to 60 per cent. With a 11 per cent increase in the (Centre’s recommended) Fair and Remunerative Price (the floor set by it) for sugarcane, even 18-19 million tonnes production can be a bumper one. And, if the imported sugar arrives, farmers will find it difficult to recover cane dues.”

The industry has also represented against the 18 per cent rate fixed in the coming goods and services tax (GST) for ethanol — mills’ by-product from refining cane, which is bought by oil marketing companies (OMCs) for blending with petrol. The price of ethanol, set by the government, was cut last year from ~48 a litre to ~39 a litre. At an 18 per cent GST, mills say sale to OMCs is not viable for them. Isma wants a cut in this GST to five per cent. And, an increase in ethanol prices for supplying to OMCs.