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News
Govt allows duty-free import of raw sugar up to 5 lakh tonnes
Date:
06 Apr 2017
Source:
The Indian Express
Reporter:
ENS Economic Bureau
News ID:
6561
Pdf:
Nlink:
The government on Wednesday allowed duty-free imports of raw sugar up to 5 lakh tonnes to keep domestic supplies steady amid a drop in production. However, such imports will be allowed only until June 12 under a tariff rate quota, according to a notification in Parliament. This is the first time since 2012 that imports of sugar under the open general licence (OGL) will take place at zero duty, albeit in limited quantity.
Imports of raw sugar beyond the stipulated quantity and the deadline will, however, attract the 40 per cent duty
that has been imposed since April 2015. The Directorate General of Foreign Trade is expected to soon notify the modalities of such imports.
The decision comes barely three weeks after Uttar Pradesh assembly poll results, which has been the traditional epicentre of massive cane arrears due to the state government’s arbitrary fixation of cane prices.
Imports of raw sugar at zero duty will allow a mill or a refiner to sell the sweetener in the domestic market at roughly
Rs 3-4 per kg lower (after refining it) than the current ex-mill price of white sugar. At Tuesday’s international raw sugar price, the cost of refined sugar in India out of imported raw will work out to around Rs 31-32 per kg, if the sweetener is allowed at zero duty.
The ex-factory price of domestic white sugar currently stands at around Rs 35-36 per kg. Sugar production has
been hit hard by dry spells in Maharashtra and Karnataka, although Uttar Pradesh witnessed bumper production in 2016-17. “The decision to allow limited duty-free imports is aimed at keeping domestic supplies steady in case consumption picks up and also to have adequate stocks by the end of this season so that there is no scarcity before the new sugar comes in. However, as of now, we don’t have any real shortage of sugar due to massive carry-forward stocks from 2015-16,” said a senior government official.
While the food ministry has projected production to drop to 22.5 million tonnes for the current marketing year through September, down from the official estimate of 25.1 million tonnes in 2015-16, the Indian Sugar Mills Association has pegged output at just 20.3 million tonnes for 2016-17.
The shortfall in production led to calls by refiners and traders for scrapping or trimming the 40 per cent import duty on sugar (both raw and white).
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