After the Central government's initiative to allow tax-free purchase (import) of raw sugar to ease domestic prices, the state-run trading agencies have contracted about 20,000 tonnes of white sugar imports from Thailand and Brazil. N Sanyal, joint secretary for the food ministry, said that one of the state-run trading agencies had ordered 15,000 tonnes of white sugar from Thailand and the balance from Brazil and shipments were expected to arrive by the third week of May.
Further, the government has allowed the State Trading Corp of India Ltd (STCI), Minerals and Metals Trading Corporation (MMTC), National Agriculture Cooperative Marketing Federation of India (NAFED) and others to import upto one million tonnes of white sugar tax-free till July. "This is a commercial decision and the situation is dynamic. Tomorrow, white sugar imports may seem very attractive. India's sugar production would touch 15 million tonnes higher than trade's estimate of 14.2 million tonnes," Sanyal added.
Some analysts have also said that domestic prices were still below the landed prices of imports, making overseas purchase of refined sugar less attractive. AU Jain, president of the Bombay Sugar Merchant Association, said, "The landed cost was around Rs 23 per kg, slightly higher than the local price of about Rs 22.5."
India's sugar output has fallen this year, a cyclical decline after a glut lowered prices and made cane cultivation less attractive. But demand has remained high, and is expected to soar in future. Sanyal said, "There are people who are willing to pay and that makes me believe that white sugar imports are feasible. We target to have stocks of 5.5 million tonnes when the new sugar season will start in October. That level is needed to keep the market under check."
Source : www.fnbnews.com