The Election Commission has cleared the government's decision to abolish import duty on raw and refined sugar, a senior government official said. The government had taken the decision to abolish import duty on both raw and refined sugar last week, but could not make any announcement because of the election code of conduct. India is the largest consumer of sugar and the move will help in softening retail prices of sugar before the general elections. A notification abolishing the 60% duty would be published by the finance ministry soon, commerce secretary G K Pillai said. The decision has been taken to stabilize sugar prices which have been steadily going up, he told media persons Retail prices of sugar have shot up to Rs 23-25 a kg from Rs 17-18 in August last year.
The government has also decided to allow zero duty import of sugar under the open general licence scheme. Unlike the advance licence scheme, under the open general licence scheme, importers do not have any export obligation. They can import goods duty free without any commitment to export.
Despite continued efforts by the government, sugar prices have touched a three-year high, reflecting the demand-supply mismatch. Ex-factory prices in Uttar Pradesh, the country's second largest producer, touched a three-year high of Rs 2,400 a quintal. Spot prices in Maharashtra, top producer of sugar, jumped 5.2% to Rs 2,378 a quintal. In Delhi, the average retail price has touched Rs 27 a kg, up 35% since October. In Mumbai, the retail price ranges from Rs 24 to Rs 28, from kirana shops to supermarkets.
According to the latest projections by the Indian Sugar Mills Association, the country's sugar output in the season ending September 30 is likely to touch a four-year low of 14.5 million tonnes. This is a decline of over 45% from the 26.5 million tonnes last season. The fall can be attributed to lower acreage under sugarcane and an over 10% drop in recovery.
Source : www.fnbnews.com