Govt had scrapped import duty on sugar in Feb 2009 to boost domestic supply

The Food Ministry has proposed imposing 10% import duty on sugar as the country has surplus domestic production.

The zero import duty regime expired on June 30. The government had scrapped import duty on sugar in February 2009 to boost domestic supply. Prior to that the import duty was 60%.

Sources said the Food Ministry has made recommendation to rationalise the duty structure on sugar in line with other farm commodities. It has suggested the import duty on sugar to be capped at 10%.

The ministry has not proposed higher duty so that to keep the import option open to the traders in times of shortages, they added.

Before sugar export was brought under the open general licence (OGL) in May, the government had allowed export of 2 million tonne of sugar in view of higher production. Under the OGL, traders have got nod to export 7 lakh tonne so far.

The government has allowed exports as domestic production is estimated at 26 million tonne in the 2011-12 marketing year (October-September), against the annual demand of 22 million tonne.

According to sugar industry body ISMA, sugar production in the 2012-13 marketing year is expected to be higher than the demand at 25 million tonne.

source: BS

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