Duty-free sugar imports extended till March 31

As a preemptive measure against rising food inflation, the government today extended the zero-duty regime on refined and raw sugar imports by three months to March 31.

In April 2009, the government had done away with import duty on sugar following a sharp decline in domestic output to nearly 15 million tonnes against the annual domestic demand of 23 million tonnes.

After the zero-duty regime lapsed on December 31, 2010, it had brought into effect the earlier duty structure of 60 per cent.

However, a fresh notification issued by the Central Board of Excise and Customs (CBEC) on January 8 extended the duty-free regime till March 31. The country’s food inflation touched a 23-week high of 18.32 for the week ended December 25 on the back of rising onion, vegetables, wheat and milk prices.

Sugar prices are at present hovering at Rs 35 per kg which is considerably lower compared to the corresponding period last year recording Rs 50. In last three months, retail prices have increased by Rs 2 per kg, according to the Department of Consumer Affairs on opening up of exports and global sentiment of a shortage. Sugar has a weight of 1.73731 per cent in the wholesale price index inflation.

Sugar output in India, the world’s second biggest producer, is estimated to touch 24.5 million tonnes in 2010-11 sugar year (October-September), against the annual domestic demand of 23 million tonnes.

Besides, the country has an opening stock of about five million tonnes. On the expectation of better output, the government had allowed sugar exports of 1.5 million tonnes under the Open General Licence (OGL) and Advance Licence Scheme.