With an intention to help distressed cane farmers and mills that are reeling under the effect of low domestic and international prices, Union Food Minister Ram Vilas Paswan plans to seek an increase in import duty on sugar to 40% from 25% earlier. A hike in the import duty will make imports uneconomical for sugar refiners despite a plunge in global prices.
According to the Food and Agriculture Organization (FAO) of the United Nations (UN), global sugar price index averaged 187.9 points in March, a sharp decline of 9.2% from February and the lowest since February 2009.
In August last year, import duty on both raw and refined sugar was raised to 25 per cent from 15 per cent to bail out the cash-starved sugar industry. However, without the increase there has been negligible import of sugar.
The Union Food Minister also underscored that his ministry was looking into various measures to lift the beleaguered industry from the doldrums, which could help farmers’ and millers’ issues. However, the industry also feels that the government should create a strategic stockpile of sugar immediately. The industry body, Indian Sugar Mills Association (ISMA) wants the government to create a buffer stock of sugar of 2.5 million tonne, just like China has done, which will ensure that farmers get prices and it gives the industry the liquidity to pay farmers.
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