Govt defers decision on imposing duty on refined sugar

The government today deffered a decision on imposing import duty on refined sugar in the wake of high food inflation.

An Empowered Group of Ministers (EGoM) on food, headed by Finance Minister Pranab Mukherjee discussed in detail and decided not to take any decision on the Food Ministry's proposal on sugar import, according to official sources.

As on June 12, the country's annual food inflation touched 16.90 per cent. Presently, sugar prices have come down to Rs 32-34 a kg from nearly Rs 50 per kg in mid-January, but they are still ruling higher as compared to last year.

According to sources, "Some ministers suggested not to tinker around with import duty on sugar at present as food inflation is still a concern." The EGoM hence decided to keep a watch on sugar prices for some more days before imposing duty on the sweetener, sources added. 

The Food Ministry is believed to have recommended about 15 per cent customs duty on refined sugar to avoid cheap imports, sources said. Meanwhile, the panel of ministers also deffered a decision on reducing the quantity of sugar that mills are obligated to sell to the goverment for ration shops.

Currently, mills sell 20 per cent of their sugar production to the government, while the proposal was to bring the quantity down to 16 per cent. To curb price rise, the government allowed zero-duty import of raw and refined sugar since February last year. The duty-free imports are valid till December.

The country has imported six million tonnes of sugar since February 2009 to meet the domestic demand, which is estimated at 23 million tonnes. While sugar production in the 2009-10 crop year (September-October) is estimated to be about 18.5 million tonnes.