India Likely To Mull Scrapping White Sugar Import Tax

NEW DELHI - India's federal Cabinet is likely to consider within a day or two a proposal to scrap a 60% import tax on white sugar to meet a domestic supply shortfall, industry officials said Wednesday.

A top industry official told Dow Jones Newswires the issue is likely to come up at the next cabinet meeting. A government spokesman said he didn't know when the next Cabinet meeting was scheduled.

Last week, a senior government official said the government was mulling the issue, but added that the measure wouldn't likely go into effect until at least June because of federal elections in April-May. Policy making must be put on hold in India before elections and until the new government is sworn in.

Germany-based analytical firm F.O. Licht said Tuesday that India is likely to cut its tariffs on white sugar imports in the second half of 2009.
"Nothing will happen until after India's election, but it is likely that the 60% tariff on white sugar imports will be reduced or removed in June or July," Stefan Uhlenbrock, a senior commodity analyst at F.O. Licht said on the sidelines of a conference in Sao Paulo.

The government last month eased restrictions on the importation of duty-free raw sugar.

Since the start of the marketing year in October, Indian mills have imported about 1.3 million tons of raw sugar, according to the Indian Sugar Mills Association.
The country's sugar output in the crop year ending September is likely to drop to 15.5 million tons from 26.3 million tons last year.

source: marketwatch