Sugar ind seeks hike in import duty and export sops

Govt should assist the sugar industry in exporting 30-40 lakh tonnes in the next 8-10 months: ISMA

ISMA, the apex body for sugar industry, today demanded the government to increase import duty on sugar and provide assistance for exports to bail out the sector that suffered losses in 2012-13 season.

"Immediately increase the import duty from the current 15% to at least 40% on both white and raw sugar," Indian Sugar Mills Association Director General Abinash Veram told reporters here.

Stating that sugar mills have a huge opening stock of about 90 lakh tonnes, ISMA said the government should "assist the sugar industry in exporting 30-40 lakh tonnes in the next 8-10 months."

In Uttar Pradesh alone, the sugar mills faced a loss of about Rs 3,000 crore because of higher sugarcane price in the state, Verma added.

The association also said the Centre should impress upon the States to immediately accept and implement the Rangarajan Committee recommendations linking sugarcane price to the sugar price and by-products price realisation.

Stating it faced liquidity crunch, ISMA said the government should re-introduce the interest subvention scheme on bank loans to enable sugar mills to meet the working capital requirement.

"Government brought in a scheme in 2007-08, whereby loans equivalent to excise duty paid/payable in two years, were given by banks, and the interest burden was borne by the Central Government as well as the Sugar Development Fund to an extent of 12% per annum. A similar scheme now would give liquidity of Rs 3500 crore to mills," ISMA said.

It also suggested that the Centre should create strategic sugar reserves of 20-30 lakh tonnes, to be held regionally by FCI.

"These steps are required to be implemented immediately so that the sugar industry could start their sugarcane crushing on time in 2013-14 sugar season and save the industry and farmers from sickness and extinction," the association said.

Sugar production of India, the world's second largest producer and biggest consumer, is estimated at 250 lakh tonnes in the 2013-14 season (October-September) as against 251 lakh tonnes in the previous year.

This would be the fourth successive season when sugar production is higher than domestic demand, which is seen at 230 lakh tonnes annually.