New Delhi, January 8
Indian sugar mills and traders are importing sugar even though the country is sitting on surplus, in fact, overflowing domestic stocks. The reason is simple — raw sugar is selling much cheaper in the global markets and, added with the benefit of the low import duty for sugar mills, it works out cheaper to buy raw sugar from Brazil than procuring it here. Imports are also taking place from Pakistan, which is selling sugar at much cheaper rates than India.

Farmers’ groups, which are demanding a ban or at least a hike in the import duty from the current 10% to at least 60%, have now written to Prime Minister Manmohan Singh urging him to protect the interests of sugarcane farmers, consumers and the industry.

According to the convener of the Indian Coordination Committee of Farmers’ Movement, Yudhvir Singh, Indian mills like ED&F Man and Renuka signed deals to import 450,000 tonnes of Brazilian sugar from October 12 because of low international prices, which would affect domestic prices.

The Indian Sugar Mills Association, which too has been clamouring for an a rise in import duty, says Indian mills imported 800,000 tonnes till Dec 10.

Even though the government has hinted at a hike in import tax on sugar, officials say there are no immediate plans to do so. On the industry’s and farmers’s apprehensions, they said an eye was being kept on domestic prices and imports. Singh however, contends this, saying while it is expected imports would bring down retail prices, past experience indicates “huge dutyfree imports do not help consumers at all, except helping the importers, foreign traders and bureaucrats and politicians who get commissions on each order. ”

Sources add the system is working only to benefit “some importers”.