India, the world's biggest sugar consumer, has no plans to allow extra imports of the sweetener as stocks held in mills will suffice, Food Minister Ram Vilas Paswan said on Thursday.
Last month, the government allowed imports of half a million tonnes of duty-free raw sugar, as a drought cut output below consumption for the first time in seven years.
Traders were speculating that the government could soon be forced to allow imports of an extra 500,000 to 1 million tonnes to meet local demand, estimated at 24-25 million tonnes a year.
"We expect this year's production at 20.3 million tonnes and we had 7.7 million tonnes of carryover stocks at the start of the season, with consumption estimated at 24-24.5 million tonnes, we'll have a surplus of 3.5 million tonnes when the new season starts on Oct. 1," Paswan told Reuters in an interview.
After consuming 2 million tonnes of sugar in October, India will be left with about 1.5 million tonnes in November, when the new season supplies pick up, he said.
Local sugar prices are steady around 38,000 rupees ($590.38) a tonne despite an uptick in demand during the summer months when sales of ice cream and cold drinks soar, potentially boosting demand for sugar.
Paswan also said his government has no immediate plans to raise the import tax on wheat.
India, the world's second-biggest wheat producer, in March imposed a 10 percent import tax on the grain to curb imports when Indian farmers were starting to harvest their crops.
But most flour millers and biscuit makers in the port cities of southern India still find it attractive to import wheat from France, Ukraine and Australia.
"As long as these imports do not depress prices here and our farmers can get their guaranteed prices, we do not see any need to raise the import duty further," Paswan said.
The state-run Food Corporation of India, the main grain procurement agency, has so far bought 27.1 million tonnes of new season wheat from farmers against previous year's total local of 230 million tonnes, Paswan said, indicating a robust harvest.
The government has no immediate plans to tweak imports taxes on crude palm oil and refined vegetable oils, Paswan said.
The world's biggest vegetable oil importer late last year cut the import duty on crude palm oil and refined edible oils by five percentage points to 7.5 and 15 percent respectively.
Source: moneycontrol.com