In order to augment domestic supplies ahead of the festive season, the government has allowed import of 3 lakh tonnes of raw sugar at concessional duty of 25 percent. In the month of July this year, the government had increased import duty on sugar from 40 percent to 50 percent to restrict cheap inward shipments and maintain domestic prices.
Sugar production in India is estimated to decline to around 21 million tonnes (MT) in 2016-17 season ending September from 25 MT in the previous year, while the annual demand is 24-25 MT. In April this year, the Central government allowed duty free import of raw sugar up-to 5 lakh tonnes to boost domestic supplies and check price rise amid production fall. Earlier, the government had imposed stock limit on sugar mills for the next two months in a bid to keep sugar prices under control during the festive season.
As per the government’s notification, by the end of September, a mill cannot keep more than 21 percent of its total sugar availability for the entire 2016- 17 marketing year and a factory cannot hold more than 8 percent at the end of October. At present, sugar is being sold at an average price of Rs 42 per kg in most retail markets in the country, while branded sweetener is available at Rs 50 per kg. In the international market, white sugar prices have fallen by 8 percent since July and trend seems downward. Also, the domestic wholesale price of sugar are flat.