The government is mulling an option to raise import duty on white sugar which is currently hovering at 10%. It is also contemplating to retain the levy at 10% on raw sugar for the next three months. This step by the government is in order to avoid flooding of white sugar in the domestic market and a final call on this issue would be taken by the Finance Ministry.
In last few days on account of sufficient supply the ex-mill rate of sugar in the country has declined by Rs 200 and stood at Rs 3,260 per quintal. Since large scale imports could dampen domestic prices, hitting margins of Indian mills and further affecting cane payment to farmers it is necessary to hike the import duty on white sugar.
India’s sugar production is estimated to be 26 million tonnes (MT) in this year, higher than the annual demand of 22 MT. Since prices for white sugar are higher in the country it is currently being imported mostly from neighbouring Pakistan.