Private and cooperative sugar mills have opposed the import of raw and white sugar
Mumbai: October 25, 2012, In a first, both the private and cooperative sugar mills unanimously oppose import of raw and white sugar during the current crushing season.
However, they differ on the extent of the import duty.
While the Indian Sugar Mills Association (Isma), a representative body of private mills, have appealed to the Centre to increase import duty from 10 per cent to 25 per cent, the Federation of Cooperative Sugar Factories in Maharashtra has asked the government not to scrap the 10 per cent import duty.
The federation, an apex body of over 170 cooperative factories, also demanded that the mills that import raw sugar, which they later export as white sugar, should not be exempted from the ‘levy sugar’ obligation (giving sugar at cheaper rates to the government for distribution in ration shops) or from paying excise duties.
In a presentation to the Centre, Isma president Gautam Goel said that with the unviable international market for Indian sugar, the import will only add to the surplus sugar availability in the country. “It will burden the finances of sugar mills, which will lead to cane payment arrears. The impact would be very obvious when sugarcane area for harvesting in 2013-14 will see a drop and sugar availability will suddenly become scarce. The country would be forced to become a net importer from 2013-14 sugar year itself,” he said.
Echoing similar views, cooperatives’ federation chairman Vijaysinh Mohite Patil said that import was not required as it may reduce sugar rates in the domestic market, especially in Maharashtra, where there would be less output for want of adequate sugarcane.
“Currently, the ex-mill sugar price is in the range of Rs 3,220-3,250 per quintal, against the global price of Rs 3,050-3,100 per quintal. The government should not scrap 10 per cent import duty on raw and white sugar. But at the same time, those mills be asked to contribute towards levy obligation and payment of excise duty,” Patil noted.
Cooperative sugar industry’s views were shared by Maharashtra Chief Minister Prithviraj Chavan and cooperation minister Harshvardhan Patil, who have indicated that sugar production in the state would be reduced by 40 per cent on account of less sugarcane availability.
On the other hand, Isma said that with comfortable opening balance of 6.5 million tonne and a surplus of almost 1.5 million tonne over the domestic requirement of 22.5 million tonne, India could export 2 million tonne this season.
Isma said that white sugar produced from imported raw sugar can’t be cheaper than the domestic sugar, produced from sugarcane. “If that happens, there will be a clear disincentive to buy sugarcane and, if it is bought, it will be difficult to sell the same in competition to imported raw sugar-based white sugar. With an unviable export market, mills will be burdened with sugar stocks and farmers will not get paid on time, leading to cane price arrears and diversion of area from sugarcane from 2013-14 season,” Isma added.