In a move that would make the sugar dearer , the government has hiked import duty on sugar to 15% from 10% to help the industry in clearing outstanding payments to sugarcane farmers, which have mounted to Rs 9,000 crore from Rs 5,000 crore in the last one year. In a notification issued by the Central Board of Excise and Customs (CBEC), the duty of both raw and white (refined) sugar, have been raised to 15 percent.
Industry associations like ISMA and NFCSF, for long have been demanding a hike in import duty to 30-40 per cent, on the ground of the country having surplus sugar production. The sugar imports putting pressure on domestic prices have been preventing millers from clearing cane arrears to farmers.
According to reports, millers in Uttar Pradesh are selling sugar to wholesalers at rates lower than even the production cost. Currently, ex-factory price of sugar in Uttar Pradesh and Maharashtra is ruling at Rs 31 and 28.50 per kg, respectively, as against the production cost of Rs 35 and Rs 31 per kg, respectively.
The hike in duty, which is aimed at curbing import of sugar and improving the bearish sentiment in domestic market, is sure to prop up local prices which are falling due to ample and cheap global supplies. According to the Indian Sugar Mills Association (ISMA), the country has imported nearly 6,00,000 tonnes of raw sugar and another 1,00,000 tonnes of refined sugar from Pakistan so far this marketing year.
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