Govt allows duty-free raw sugar import by bulk users

The government has allowed bulk sugar users like soft drink and ice cream manufacturers to import "raw sugar" at zero duty from today to keep the prices of the sweetener at a reasonable level.

Earlier, food processing companies were allowed to import only "refined sugar" at zero duty.

About 60 per cent of India's total sugar demand of 23 million tonnes is from bulk consumers, like manufacturers of soft drinks, biscuits and confectionery.

The bulk users may be asked to tie up with domestic refiners for processing the imported raw sugar, government officials said.

The Central Board of Excise and Customs, which notified the order on March 31, said raw sugar would attract zero duty if imported by bulk users in the next one year.

The government since April 2009 has already allowed mills to import raw and refined sugar without duty till December 2010.

The decision would help augment domestic availability and keep sugar prices at reasonable level, officials said.

So far, over 6 million tonnes of sugar has been imported by India to bridge the demand-supply gap.

With fall in domestic prices over the past month, the industry has demanded that the government should re-impose the duty on sugar imports.

However, Food and Agriculture Minister Sharad Pawar had last month rejected the industry demand saying government would not take any step which could increase prices of essential commodities.

Sugar prices in the retail market of Delhi have fallen to Rs 35-36 a kg from Rs 48 in January on government measures like imposing stock limits on bulk consumers.

At present, bulk consumers are allowed to keep sugar stock for only 10 days of their monthly requirement, though there is no such ceiling on imported sugar.

India, the world's second-largest producer and the biggest consumer, may produce over 17 million tonnes of sugar in the current season against 14.7 million tonnes in 2008-09 season (that runs from October to September).