Agri Business

With exports in check, sugar import duty may not be pruned for now

Amiti Sen New Delhi | Updated on January 16, 2018 Published on December 29, 2016


Exports have come to a standstill since a 20% import duty was imposed in June

The Central government doesn’t have immediate plans to lower import duties on sugar as it did with wheat. The export duty imposed in June this year has managed to contain exports and ensure adequate availability of the sweetener in the domestic market for the present, a government official said.

However, if a subsequent review in production number shows a lower output than the estimated 22-23 million tonnes (mt) and there is a spike in the domestic prices which have been slightly hardening, the Centre could re-consider its options.

With import duty on sugar fixed at 40 per cent, there are no imports taking place.

“The idea behind imposing the export duty of 20 per cent in June this year was that if we don’t have any exports then we may be able to manage without imports. Right now there is no pressing need to encourage imports as with production estimated at 22-23 mt in the 2016-17 sugar season (beginning October), the shortfall of 2-3 mt could be made good by the carryover stock if exports don’t happen,” the official said.

Export prospects sour

According to industry body Indian Sugar Mills Association, exports have stopped since a 20 per cent import duty was imposed in June as shipments from India are no longer viable in the global market.

India, which is the world’s second largest sugar producer after Brazil, exported 1.6 mt of the sweetener till May in the 2015-16 marketing year (October-September).

With no exports happening, India could manage with a sugar output of 234 lakh tonnes (23.4 mt), as estimated by the industry, with a carryover stock of 77 lakh tonnes as on October 1, 2016 as it would result in total sugar availability of 311 lakh tonnes against estimated consumption of 255 lakh tonnes.

However, things could change if the estimates go wrong. “We don’t have an accurate system of data collection for agriculture. Now that crushing season has started, after two-three months different data could emerge on production. But as of now, there are no intentions to import,” the official said.

Sugar prices are ruling at about ₹40/kg in the open market, about the same level as was in June this year, but there have been fluctuations following the government’s decision to demonetise high-value notes in November.

Published on December 29, 2016
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