Government may impose import duty on sugar in a week

The government is likely to impose import duty on sugar in a week as cane planting gathering speed in the country

The Finance Ministry, which is seeking 15 per cent import duty, is likely to take a decision on the Food Ministry's proposal to end duty-free imports of sugar. It may be recalled that the Ministry, while extending an earlier deadline in April, had given the nod for duty-free imports till June 30.

A Food Ministry official, who foresees the Finance Ministry making an announcement regarding the increase in duty soon, believes that the government does not want the industry and farmers to be disadvantaged by imports.

Nevertheless, experts reckon that with the decline in domestic prices due to surplus output, the likelihood of imports was anyway low, even without duty.

Being the world's top sugar consumer and the biggest producer after Brazil, India's production is forecast to touch 24.5 million tonnes, against an annual consumption of about 22 million tonnes in the 2010-11 year ending in September. In the previous season, production was 19 million tonnes.

Meanwhile, the domestic sugar industry has been putting pressure on the government to convince the Food and Commerce ministries of the need to urgently open the exports quota as it has almost been used up. With sugar production in 2011-12 projected to be higher than the previous seasons at around 29.3 million tonnes, a decision on opening up exports becomes all the more essential.

As of now, sugar mills have exported close to 400,000 tonnes, of the half million tonnes permitted by the government under open general licence (OGL) for the 2010-11 sugar year, which began in October