Govt to decide sugar import duty after examining 2010-11 yield.

New Delhi: The Centre will only decide on whether to re-impose duty on sugar imports after it verifies the sugar production for the 2010-11 sugar year, food and consumer affairs minister Sharad Pawar said.

"We will have to make a firmer assessment of sugar production for the year first. If things look comfortable, we will consider levying import duty (from January 2011), " minister Pawar said here. Zero duty on sugar imports is valid till December 31, 2010. This comes at a time when the food ministry has signalled that it will review sugar production for the year between end December/early January when it hopes to have firmer projections on cane acreage, yield and sugar recovery.

Should production be pegged at around 24mt, around half a million tonne of sugar could be opened up for exports, officials recently indicated. This, even if sugar production estimates were much lower than the early industry projections of 25.5mt. The ban on sugar futures trading has also been allowed to lapse by the FMC in end October.

Import duty on sugar was reduced to zero from a high 60% in the 2009-10 sugar year (October-September) against a backdrop of low output projections.The move was aimed at allowing companies to import both raw and white sugar to bolster domestic supply at a time when prices shot up to an almost record Rs 50/kg in the retail. Since then, prices have come down by around Rs 20/kg.

The sugar industry is not only upset over the fact that current sugar prices are well below breakeven point, but also over the inordinate delay by the government in opening up exports. In October/early November, sugar prices in the global market shot up to record highs against tight supply but since then, prices for white sugar have dropped by almost $80-100/tonne.

Official projections have pegged sugar ouput this year at 24.5mt while industry is sticking to its outlook of 25.5 mt against a local consumption demand of only 23mt.


Source : economictimes.indiatimes.com