Govt mulls regulations on white sugar import

NEW DELHI: The Centre may still be unwilling to re-impose import duty on sugar (both ready to eat and raw) just yet although sugar prices have
plunged to Rs 32-34/kg from almost Rs 50/kg in January but it could consider imposition of monthly regulations on import of white sugar.

Indications that the Centre could likely mull regulations to limit the quantum of white sugar imported each month came when sugar makers met food minister Sharad Pawar on Wednesday.

However, no indications were given as to when this could possibly be done. Analysts perceive that the Centre s decision to shorten the stock holding limtis for sugar was a key development that forced bulk users to access almost their entire sguar needs through imports post January 2010, a development seen as hurting the bottomlines of sugar companies markedly.

The food ministry s contention is that a review of the import duty could be possible well before September (when the new sugar crushng season begins) if need be. We are stringently monitoring sugar prices and will take action when necessary, official sources said.

A ministry official flatly denied that there were any plans to further cut the existing stock holding limit period for bulk users from the current 10 day limit. That would be very untimely and disastrous to the sugar industry at this point, analysts agreed.

A parliamentary standing committee had recommended this earlier this year when sugar prices were soaring. Even if the government does not want to re impose the 60% duty on white sugar or re move all stock limits on sugar stock holding by bulk users, it should atleast impose some conditions on the monthly import by such users. After all, 60% of the consumption of domestic production is by them.

At a time when sugar prices have fallen below break even production price level, industrial and bulk usersIn January this year, the government allowed import of refined sugar at zero duty up to December 2010.

More recently, it abridged the stock holding limit for bulk users from 15 days to only 10 days, forcing top branded companies to source all of their needs for sugar through imports. That freed up an estimated four million tonnes additional tonnes of sugar for the domestic market, one key reason why domestic retail prices were pressured down significantly.

Import of white sugar was earlier allowed till March 31 this year earlier but extended upto December subsequently.

source: ET