In a bid to rein in sugar prices, the government yesterday announced a 20 percent import duty on the sweetener. The duty, which works to around Rs 7,000 per tonne, will likely bring exports to a halt, said ISMA Director General Abinash Verma. "There was a small margin of about Rs 500-1,000 that we used to get on imports," he said. Going forward, Indian sugar prices will depend on local demand-supply situation. "For the next year, sugar production and consumption may match, leading to prices to remain stable," Verma said. Below is the verbatim transcript of Abinash Verma's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18. Sonia: What have you made of the 20 percent duty on exports and how much pressure do you think that could put on prices in the near term? A: Almost a week back, the honourable food minister Ram Vilas Paswan tweeted saying that the government proposes to impose export duty on sugar of 25 percent. I do not think it is a surprise today; the market was expecting for the last one week. Therefore the market would have taken this into account that this was going to come up. Second, as far as this decision is concerned, I believe that the government has taken a step to kind of stop any extra exports because the sugar production and consumption next year seems to be almost equal to each other and there will be a tight position even though we believe that there will be a surplus of about 45 lakh tonne to be carried forward into the next sugar season. However, if the government feels that there is a tight position, the government thought that they do not want to allow any further exports, so that they can conserve whatever sugar available in the country. Latha: What exactly was the exported quantum? A: In the current season the government had given a target to the sugar industry to export 32 lakh tonne and out of that about 16 lakh tonne has left in the country. The recent spurt in the global prices because of some problems in the Brazilian sugar production and exports from Brazil had pushed the global prices quite steeply in the last few months and that had made Indian exports viable. There was not a very big margin. I would believe the margin would be anywhere around Rs 500 to Rs 1,000 per tonne. However, now with the 20 percent export duty on sugar, the export duty works out to almost about Rs 7,000 at the current prices. So the export duty makes the export unviable to the extent of Rs 6,000 per tonne. Latha: Does this rule just plateau or keep the sugar prices stable at current levels or will this rule of no exports have an impact of depressing sugar prices? A: I do not think it is going to impact the domestic sugar prices because we are isolated from the global market currently because there is an import duty of 40 percent and now they are imposing 20 percent duty on exports. Therefore, we are now in a kind of insulated on an isolated position, the domestic consumption and domestic production be met from the domestic supply. So, I do not believe that this export duty will push down the domestic prices. The prices are going to remain stable because the demand supply position, the fundamentals kind of indicate that it is good. Sonia: Where do you see the prices over the next two-three months? Currently they are around Rs 33 per kilo. What kind of an upmove or stability do you see in prices over the next two-three months? A: I believe it should remain stable. If these extra exports would have happened, it would have pushed up the prices quite steeply. So now that the government has taken this decision to impose 20 percent export duty, no sugar will move out of the country and if the domestic supply and demands are going to match each other, the next few months will see the sugar prices being stable at the current levels of Rs 33-34.