The Centre on Wednesday said it will allow duty-free import of raw sugar up to 5 lakh tonne, till June 12.

The decision seeks to address regional production gaps and maintain domestic prices at reasonable levels, according to Union Minister for Consumer Affairs, Food & Public Distribution, Ram Vilas Pawan.

“The import shall be done with zonal quantity restrictions and will be open for only millers/refiners having their own refining capacity,” an official release stated.

Paswan, however, added that considering the quantity of sugar available as opening stock and the production in the current sugar season, it is estimated that there is adequate quantity of sugar available in the country for domestic consumption.

Last month, sugar millers’ body ISMA had projected production for sugar season 2016-17 (October to September) at 20.3 million tonnes, lower than earlier projections of 21.3 mt and 23.4 mt. The lower estimate was attributed to production getting hit in Maharashtra, Karnataka, Andhra Pradesh and Telangana due to drought in the last two years. The annual demand a year ago was around 25 mt.

The country had an opening stock of 7.7 mt of sugar on October 1. With an estimated production of 20.3 mt, the total availability this year is expected to be about 28 mt, which is much higher than the annual requirement.

The imports would help the country in carrying forward a comfortable opening stock next year. The All India Sugar Trade Association, an organisation representing millers, cooperatives, refiners, international traders and brokers, has pitched for duty-free imports of 1-1.5 mt to avoid a possible shortage in the current sugar season.

Raw sugar rises sharply Reuters reports that raw sugar futures rose sharply on Wednesday, boosted by New Delhi’s announcement. “The question now is whether 500,000 tonnes will be enough; we believe there is potential for further imports,” ING said in a market note.

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