Millennium Post

Coop sugar factories want import duty hiked to 30%

Worried that sugar imports would depress domestic prices thereby affecting realisation and payments to cane growers, cooperative sugar factories body NFCSF has sought hike in import duty on raw and refined sugar to 30 per cent from 10 per cent.

At present, sugar imports via open general licence (OGL) route are permitted at 10 per cent duty.

'We request you to check sugar import under OGL and to improve ex-factory sugar prices, import duty on raw and white sugar should be increased to 30 per cent,' National Federation of Cooperative Sugar Factories (NFCSF) President Kallapa B Awade said in a representation to the Food Ministry.

Traders have imported 4,68,000 tonnes of sugar so far even as the domestic production is expected to surpass the demand in the ongoing 2012-13 season (September-October), he said, adding that some imports are also coming from Pakistan.

According to National Federation of Cooperative Sugar Factories estimates, sugar production will be 25 million tonnes (MT) this year as against the demand of 22.5 MT. Taking into account imports, an opening stock in the next year would be around 9.66 MT.

'Considering the initial three months requirement of sugar for 2013-14 of about 5.8 million tonnes, India will have a net surplus of sugar of 3.86 million tonnes,' it said.

The surplus sugar cannot be exported as international prices are ruling lower. If imports are continued at lower duties, domestic prices will further fall, hitting realisation and timely payment to sugarcane growers, it noted.

'It is becoming very difficult for factories to pay even sugarcane prices to cane growers. The sugarcane price arrears are mounting and reached to Rs 12,600 crore up to March 15, 2013,' the National Federation of Cooperative Sugar Factories said.

The cooperative sugar body also demanded the government to give export subsidy to ship surplus sugar as this will help them to clear their cane arrears. The ex-factory realisation are falling since October 2012.

The all India average ex-factory price of sugar in October 2012 was Rs 3,328.67 per quintal which has come down to Rs 2,925 per quintal in April 2013, about Rs 400 per quintal fall in the first 7 months of the year, it added.
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