Govt to impose fresh curbs on sugar imports

The government was considering various measures to control sugar imports following a petition from the domestic sugar millers, who had pointed out that cheaper imports continued to flood the country, he said without specifying the details.

In an effort to check cheap imports, the government had raised the Customs duty on sugar to 20 per cent from five per cent in January. Later, while presenting the budget finance minister Yashwant Sinha raised the duty further by five per cent as part of the exercise to rationalise Customs duty.

Besides, sugar imports attract a Rs 850per tonne countervailing duty. As per statistics available with agricultural and processed food export development authority (APEDA), which registers contracts for sugar imports, a total of 12 lakh tonnes of sugar had been imported into the country between September 1997 and January 1998. At least six lakh tonnes have been bought from Pakistan and most of the imports have been registered by traders in Amritsar.

Industry has been concerned over the recent developments wherein sugar from Thailand has also started entering the country.

At least 60,000 tonnes of sugar was contracted from Thailand in the last one- and- half month.

Domestic millers, unhappy despite the increase in sugar import duty, have been demanding that the levy be raised to the maximum level of 40 per cent. They point out that India’s Customs duty on sugar was one of the lowest in the world. The industry had begun exerting pressure on government of late due to rising stocks, which was 55 lakh tonnes at the end of the sugar year inSeptember last. Meanwhile, government feels that Pakistan’s decision to raise duty on sugar imports to protect domestic industry would not have any effect on India. In case, Pakistan required sugar from India as in 1997-98, then it would have to lower the duty, Sinha said.

Last week, Pakistan raised regulatory duty on sugar imports to 35 per cent from 10 per cent. With the hike, overall import duty would be 45 per cent, including 10 per cent basic customs duty. Industry sources said one reason why cheaper imports continued to flood the country was the fall in the value of the Brazilian real, resulting in a slide in global sugar prices.

The real has been on the slide ever since the Fernando Henrique Cardoso government scrapped its controlled real exchange rate on January 13 this year. Despite sugar import duty being hiked twice in two months, it is still out of the purview of the four per cent special additional (Customs) duty imposed in the 1998-99 budget.Industry feels that high carryover stocks coupledwith this season’s (October 1998-Sep 1999) expected output of 150 lakh tonnes.

Prices to remain depressed

NEW DELHI: Freshly released government stocks for open sales and rising imports will keep Indian sugar prices depressed in coming weeks despite a rise in summer demand, trade officials said on Tuesday.

"I don’t think domestic sugar prices will rise in the near future," said V M Bhatnagar, secretary at the National Federation of Cooperative Sugar Factories Ltd."Imports have not slowed down. We are also expecting a good domestic production this time. We had started the season with enough carryover stocks from last year," he said.

India’s Food Ministry last week released 725,000 tonnes of sugar for open sales in April, and 800,000 tonnes each for the months of May and June. Sugar demand rises during India’s summer months as consumption of such products as soft drinks and ice-cream surges.