Government re-introduces 60-per cent import duty to bolster sugar prices
31 Dec 2010
The government has reintroduced the 60 per cent import duty on sugar in the New Year by allowing a 2009 notification allowing zero-duty import of the commodity to lapse at the close of the year.
The government had, in early 2009, dropped a 60-per cent import duty and allowed duty-free import of sugar in the wake of an acute supply shortage, following severe drought in the country.
The notification introducing the 60 per cent import duty lapses today (31 December 2010) and unless extended, it automatically reverts back to the old duty structure.
Sugar futures in the local market are trading 0.8 per cent lower at Rs2,980 a quintal (100 kg) against Rs3,399.29 a quintal ($761.30 per tonne) in London, which in turn is down $65.10 or 7.9 per cent per tonne.
Sugar prices in the local retail market have softened to Rs30-32 per kg from nearly Rs50 per kg in mid-January.
With a record output of 24.5 million tonnes, current year sugar production in the country is expected to outstrip demand, leaving a surplus carryover stock, government sources said.
Sugar production in India, the top producer of sugar behind Brazil, had dropped to 18.8 million tonnes in the previous year in the wake of a severe drought.
The government has also announced plans to export as much as 500,000 tonnes of sugar. However, the plan has been delayed because of the delay in quota allocation, sources say.
