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By Mayank Bhardwaj
NEW DELHI (Reuters) - India has no plans to cut the sugar import tax for now, the food minister said on Tuesday, citing ample domestic stocks and criticising the Indian Sugar Mills Association (ISMA) for projecting output forecasts below the government estimate.
Mills in India, the world's biggest sugar producer, will churn out 20.3 million tonnes of the sweetener in the season to September 2017, the ISMA said last week, down 5 percent from its previous forecast and 13.2 percent lower than the estimate made in September 2016.
"Our government has estimated this year's production at 22.5 million tonnes, with carryover stocks from the previous season at 7.7 million tonnes, we'll have more than sufficient stocks of sugar," food minister Ram Vilas Paswan told reporters.
As a result, India's sugar inventory would hover in a range of 29 million tonnes to 30 million tonnes, compared with demand expected to be between 24 million tonnes and 25 million tonnes.
"At the end of the season in September, we'll still be left with surplus stocks," Paswan said.
Questioning ISMA's lower output estimates, Paswan said he has asked his ministry officials to take that issue up with the industry body.
"Who has given them the right to estimate sugar production? They're misleading people," an angry Paswan said. "Frequent changes impact both farmers and the industry, and the credibility of the organisation that makes such estimates."
In its March 7 press statement ISMA said that two droughts had ravaged cane crops in states such as Maharashtra, Karnataka, Andhra Pradesh and Telangana, reducing output.
On Tuesday Paris-based commodity trade house Sucres and Denrees (Sucden) said the sugar market could switch to a surplus of between 1 million tonnes and 2 million tonnes, raw value, in 2017/18 (October to September) following deficits in the 2015/16 and 2016/17 seasons.
Separately, Paswan said the government is considering reinstating the wheat import tax, which sources have said could be as high as 25 percent import.
(Editing by David Goodman)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)