Govt may raise duty-free refined sugar import cap by 1 MT

The government is planning to raise the cap on duty-free refined sugar import by one million tonnes once the current limit is exhausted, to prevent upward spiral of domestic prices triggered by supply concern.

Earlier, the Centre had allowed traders to import up to one million tonnes of duty-free white sugar till November 30.

"Once the current limit (on quantity) is exhausted, we plan to increase it by another one million tonnes," a senior government official said, adding that the November deadline for duty-free white sugar import will also be extended.

The country has so far contracted to import about eight lakh tonnes of white sugar, of which three lakh tonnes have already landed, the official said.

India, the world's largest consumer of sugar, decided to import sweetener to bridge a projected deficit of about 7.5 million tonnes between production and demand during 2009-10.

While the country needs about 23.5 million tonnes for its annual consumption, its sugar production is estimated at 16 million tonnes this season (October-September).

Sugar prices have almost doubled to Rs 36 a kg in a year and co-operative sugar factories had earlier warned that the rate might touch Rs 40 a kg in November.

Though the Centre has stressed more on raw sugar import and has not put any quantitative curb on its purchase to enable the domestic industry utilise vastly-unutilised refining capacity, it has also allowed white sugar import in limited quantity to cater for immediate market need.