The imposition of 20 per cent export duty on sugar, announced by the Centre recently, will make outbound shipments unviable, the sugar industry has said.

The Centre, however, maintains the move is necessary to check speculative rise in prices.

“With the recent spurt in global prices, sugar exports were just about becoming viable but the 20 per cent export duty, which translates into around $100 per tonne, will make exports unviable,” said Abinash Verma, Director General of Indian Sugar Mills Association (ISMA).

The decision to impose export duty has come less than a year after the Centre ordered sugar mills to compulsorily export the sweetener to cut down on increasing stock. However, increasing global prices due to shortage of production in Brazil and lower domestic production prompted the Centre to re-consider its decision.

It seems the Centre wants to conserve sugar domestically in view of an expected fall in production in the next 2016-17 sugar season, Verma said.

Domestic sugar production is expected to decline 11 per cent to around 25.2 million tonnes in sugar year 2016, and fall further to around 23-24 million tonne in 2017, according to estimates by ICRA. According to ISMA, the move will ensure that no sugar goes out of the country and domestic prices remain stable at ₹33-34 per kilogram. Around 1.6 million tonne of sugar has been exported so far in the ongoing sugar year.