Will import duty levy arrest falling sugar prices?

While the government has hinted at re-imposition of import duty to provide support to domestic realisations in sugar, Farm Minister Sharad Pawar said that India was in no hurry to impose a tax on the same.

Pawar said the government was collecting information about sugar production and observing the progress of cane planting.

“The government might consider import duty post fall in sugar prices, which in turn will help to stabilize its prices,” M Manickam Managing Director of Sakthi Sugars said adding that the realizations were below the cost of production.

Further he said the shortage was not completely bridged yet and the government might keep some window open. SY11 (September-October) sugar production estimate was seen at least 25 million tonne, which was the lower side of estimates. “There is some pressure on raw sugar as India may turn exporter in SY11. Prices need to be closer to Rs 30-31 a kg to recover cost,” he added.

However SL Jain, Former Director General of the Indian Sugar Manufacturers Association (Isma) feels that the imports of the product should not be encouraged anymore. “Domestic production should suffice.”

He felt that the policy making needed to ensure a stable price regime for the sugar industry. He is worried that sugar prices should not fall from here.

source: moneycontrol