New Delhi: The government on Thursday allowed import of 3 lakh tonnes of raw sugar at concessional duty of 25 percent to augment domestic supplies ahead of the festive season.
It had hiked import duty on sugar in July to 50 percent from 40 percent to curb dumping of the commodity in India as international prices fell.
"To supplement the availability of sugar in southern India and to stabilise sugar price, import of 3 lakh MT of raw sugar through southern ports of India at 25 percent import duty under Open General License (Tariff Rate Quota) has been allowed through millers/refiners," a statement from the food ministry said.
Food and Consumer Affairs Minister Ram Vilas Paswan said the import of 3 lakh tonnes of raw sugar was allowed to increase domestic availability and maintain retail prices at reasonable level.
"If required, we will import more, but we will not allow consumer prices to rise abnormally," Paswan told PTI.
Retail prices of Rs 42-43 per kg is reasonable, he added. The imports will be allowed through the ports of Tuticorin, Karaikal, Chennai, Mangalore, Kakinada, Gangavaram and Vishakapatnam in the South, the statement added.
The food ministry said such imports shall be open to millers/refiners who have their own capacity to convert raw sugar into refined /white.
Sugar production in India, the world's second largest producer, is estimated to decline to around 21 million tonnes in 2016-17 season ending September from 25 MT in the previous year. The annual demand is 24-25 MT.
National Federation of Cooperative Sugar Factories MD Prakash Naiknavre told PTI that the decision is "in right direction because southern states specially Tamil Nadu is reeling under third consecutive year of drought and not having adequate sugarcane for the next crushing season. As a result this crushing capacity with mills would have remained unutilised".
The raw sugar arriving at end October will be handy to attain adequate utilisation of crushing capacity, he added.
Asked about the impact on sugar prices, Naiknavre said: "This will not have an impact on prices on all-India basis because quantity is limited and arriving at restricted ports in southern states".
The government had in April allowed duty free import of 5 lakh tonnes of raw sugar to boost domestic supply.
Last month, the government had imposed stock limit on sugar mills for the next two months to keep prices in check during the festive season. By the end of September, a mill cannot keep more than 21 percent of its total sugar availability for the entire 2016- 17 marketing year and a factory cannot hold more than 8 percent at the end of October, according to the government notification issued last month.
Sugar is selling at an average price of Rs 42 per kg in the retail market, while branded sweetener is available at Rs 50 per kg. White sugar prices in the international market have fallen by 8 percent since July but raw sugar prices have remained flat. The domestic wholesale prices of sugar are also flat.
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