The sugar industry has urged the Government to increase import duty on sugar to 30 per cent from 10 per cent to protect domestic companies from cheap imports. Besides low duty, the sharp drop in international sugar prices has also led to large quantity of raw and processed sugar imports.

Domestic sugar production is expected to touch about 24 million tonnes (mt) this year against the demand of 22.5 mt. The production will exceed demand despite scanty rains in key growing States such as Maharashtra and Karnataka.

Ajit Shriram, Deputy Managing Director, DCM Shriram Consolidated and Co-chairman, CII Task Force on Sugar, said the sugar industry is already suffering owing to excessive controls of the Central and State Governments, coupled with recent hikes in cane price across the country.

“Inexpensive import due to low duty is adding to heavy losses. The Government should increase the import duty immediately from 10 per cent to 30 per cent or more to create a level playing field for the domestic industry,” he said.

The import duty on sugar was progressively reduced to 10 per cent per cent from 60 per cent in 2009 when demand outstripped supply by a huge margin. However, the situation has now reversed and sugar companies are already hit by high cane prices fixed by the Government.

P. Ramababu, Co-Chairman, CII Task Force on Sugar, said the viability of the entire industry is at stake with large scale imports of processed sugar from Pakistan and raw sugar mainly from Brazil.

Sugar production cost in Uttar Pradesh works out to Rs 36,000 a quintal with State Advised Price of Rs 280 a quintal for sugar cane. The sugar price currently hovers around Rs 32,000-33,000 a tonne, leading to a net loss of about Rs 4,000 produced in the State. With sugar production estimate of 79 lakh tonnes, producers in the State will incur a loss of Rs 3,000 crore this year alone, he said.

source: thehindubusinessline

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