A clear divide has emerged between the mills in Uttar Pradesh and those in Maharashtra and Karnataka over allowing duty-free imports of raw sugar.
This comes even as the Union Food Minister, K.V.Thomas, on Thursday told reporters that the Government had received proposals to scrap import duty on raw sugar and double the same on whites to 20 per cent.
While he did not say from where the proposal came, it is understood that there was pressure mainly from the cane-starved Maharashtra and Karnataka mills.
Deficient South-West monsoon rains this time are expected to affect cane supplies in Maharashtra and Karnataka, leading to their mills clamouring for duty-free raw sugar imports to enable running to full capacity.
bumper crop in UP
Uttar Pradesh, by contrast, is seen harvesting a bumper crop, which gives mills there sufficient cane to crush in the current season, starting October.
“We have urged our Chief Minister Akhilesh Yadav to write to the Prime Minister to increase import duty on raw sugar from the existing 10-20 per cent and the same on whites from 10-30 per cent,” said S.L. Gupta, Secretary of UP Sugar Mills Association.
different proposals
“We have received different proposals. One is to increase duty on white sugar imports to 20 per cent and another to scrap duty on raw sugar imports.
“We will discuss the issue with the Agriculture and Commerce Ministries and take it to the Cabinet in about 15 days” Thomas said.
The proposed duty rationalisation come just as crushing operations for 2012-13 season have begun in Karnataka and will take off in Maharashtra and UP after Diwali in the first week of November.
“Duty-free imports will create havoc and our industry will be totally crushed. If imports are allowed when there is surplus sugar, prices will crash to below Rs 3,000 a quintal,” said Gupta.
inventeries
The sugar balance at the start of season is about six million tonnes and the estimated production for the year is pegged at 24 mt.
With an estimated consumption of 22-23 mt, there will be a surplus of 7 mt, Gupta said, arguing that imports were unwarranted.
However, Maharashtra has urged the Union Government to abolish duty on raw sugar imports.
Making a pitch for imports, Maharashtra Co-operation Minister Harshvardhan Patil had earlier argued that it would help sugar mills tide over cane shortage and ensure stability in prices of the sweetener.