April 8 (Bloomberg) -- India’s cabinet may tomorrow discuss a plan by the food ministry to allow duty-free import of refined sugar to meet a shortage in the world’s top consuming nation, a government official said.
The government may also exempt importers of duty-free raw sugar from an obligation to export a similar quantity of refined sugar later, said the official who didn’t want to be identified.
The proposals, if approved by the cabinet, will need the consent of the country’s poll panel, he said.
The spokesman for the food and farm ministry, Manoj Pandey, declined to comment on the proposals.
Governments aren’t allowed to announce policy decisions that may sway voters once polls are notified, according to the Election Commission’s model code of conduct. India’s general elections start on April 16, with votes being counted on May 16.
Duty-free imports of refined and raw sugar may lower prices in the country and cushion consumers. Refined sugar has risen 17 percent on the National Commodity and Derivatives Exchange in Mumbai since the beginning of the year amid forecasts of a decline in output.
The Indian government had in February allowed the duty-free imports of raw sugar for sale locally on condition buyers export a similar quantity of white sugar later.
Prime Minister Manmohan Singh’s government, seeking re- election, last month imposed limits on the amount of sugar traders can hold for a period of 30 days. The curbs, aimed at cooling prices, will stay for four months.
India’s sugar output may fall 45 percent to 14.5 million metric tons from 26.4 million tons a year ago as farmers in the world’s second-largest producing nation divert sugarcane to more profitable jaggery, S.L. Jain, director general of the Indian Sugar Mills Association, said on March 30.
Source : www.bloomberg.com