After 5 lakh tonnes of raw sugar being allowed by government to import refinery and mills, sugar prices are declining in the Indian market. The government has discharged this block from outside the country till June 12. There has been a sharp fall in sugar prices in the international market.
“Prices have fallen due to an expected major turnaround in global sugar production and estimated surplus from all major sugar producing countries including India. Global sugar prices fell steeply when Brazilian production started in April,” the association said in a letter to the government.The Indian Sugar Mills Association has demanded an increase in import duty on the sweetener from 40% to 60% to prevent dumping of the commodity following the fall in international raw sugar prices. It has also demanded reduction in goods and services tax on ethanol from 18% to 5%. Global sugar prices have fallen nearly 30% in three months to about 15 cents per pound.
The association said that if raw sugar prices fall further, even at the current 40% import duty, raw sugar could be easily and profitably imported into India. “If that happens, current domestic prices may see a major fall, making it unviable for the sugar mills,” it said in the letter.
The industry body said that there is no need to bring in any further sugar into the country. The government had allowed duty-free import of 5 lakh tonnes to keep domestic prices under check. “We earnestly request you to increase the import duty on sugar to the bound rate of 60%,” the letter said.
“International market has slid 40% in the past four months while domestic prices have been steady,” said a trader with a Gurgaon-based firm, requesting not to be named.
“Last week, when New York went down to 13.74 cents per pound, this resulted in opening import parity for east coast refineries even after paying 40% import duty. We believe additional import is still unlikely because domestic prices will fall if there is excess supply in the market which will again close the parity,”
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