Centre mulls lowering sugar import duty to cool down prices

To cool down sugar prices during the festival season and also thereafter, the Central government is exploring the option of lowering the 40 per cent import duty on the sweetener in its raw form.

Officials said the department of revenue in the finance ministry has been directed to explore the possibility of lowering the import duty considering all revenue implications.

By bringing down the import duty, the Centre hopes to increase supplies of the commodity.

Sources said the food ministry complete waiver of the import duty, while other department want a token duty to be maintained.

Data sourced from department of consumer affairs shows that wholesale price of sugar in Delhi and Kolkata markets along with some other Centres have moved up by Rs 30-50 per quintal in the last two months.

The Central government in a series of measures in the last six months has imposed a 20 per cent tax on sugar exports, withdrawn the excise duty concession on production of ethanol, imposed stock holding limits on sugar mills in addition to wholesalers and retailers as it felt that some mills along with few Centre feels that sugar mills along with few unscrupulous traders could further push up the prices during the festival season taking advantage of the supply shortage.

India's sugar production in 2016-17 season that started from October is expected to around 23 million tonnes as against 25 million tonnes of 2015-16 due to drought in major growing states of Maharashtra and Karnataka.

However, some industry players feels that there would be sufficient sugar stock to meet the domestic demand of 26 million tonnes in 2016-17 as the country would have an opening stock of 7 million tonnes. The Centre too till sometime back was of the view that their won't be any shortage of sugar in the coming months, but relentless rise in prices seems to have changed its mind.

Meanwhile, news agency PTI reported that union Cabinet Secretary PK Sinha on Wednesday directed the Department of Consumer Affairs to consider all options to check sugar and chana prices in the market.

State governments have been told to impose stock limits and take action against hoarders to ensure availability of all essential commodities during ongoing festival season.

Sinha reviewed the availability as well as the prices of essential commodities at a high-level meeting with secretaries of consumer affairs, agriculture, food, commerce, expenditure and others in the evening.

"It was observed that the recent measures taken by the central government have helped containing prices of most of the pulses, which are showing declining trends, and other essential commodities except chana and sugar," an official statement said.

According to government data, chana dal is currently being sold at an average price of Rs 110 per kg.

The maximum price is Rs 145 per kg. Sugar is available at an average price of Rs 40 per kg, although the maximum rate is Rs 47 per kg.