Govt rules out plan to decontrol sugar industry

The government has no proposal to decontrol marketing and pricing of sugar and such decisions depend on how good the production is, says food and agriculture minister Sharad Pawar. “We are not even thinking of it.

These types of decisions can be taken in September after assessing sugar production and the monsoon,” he said, referring to reports of sugar decontrol and the Indian Sugar Mill Association’s demand for sugar be freed from government control and import duty be slap on the sweetener. He was responding to a question whether the government was planning to decontrol the sugar sector.

At present, the government controls everything from how much sugar mills must pay cane farmers (fair and remunerative price) to how much sugar stocks bulk users like ice cream and biscuit manufacturers can hold at a certain time. The government decides the monthly release of the sugar in the free market and makes mills obligatory to supply 20% of the production as levy sugar for distribution under the PDS. The government also decides import and export of sugar.

Govt considering 60% import duty on sugar

The Centre is considering 60% import duty on both raw and white sugar. At present the government allows import of sugar at zero duty because of shortage of the sweetener and rising prices in the domestic market. The aim would be to end all imports, with the industry fearing domestic prices would fall drastically if imports continue during the sugar surplus cycle.

A section of the industry may still want to import raw sugar from Dubai, as it is priced much lower than the prices in the Mumbai market. “Imported raw sugar from Dubai will fetch a price of Rs 2,373 per quintal against Rs 2,730 in the Mumbai market. However, if the duty-free import will continue, sugar prices in the domestic market will also fall and put additional burden on sugar mills.

source: fnbnews