Govt doubles import duty on sugar to 100%, increases chana to 40%

The government on Tuesday doubled the import duty on sugar to 100 per cent and also increased it for chana (chickpeas) to 40 per cent from 30 per cent.

This comes days after the government lifted the minimum export price (MEP) of onions.

Prices of sugar and chana have crashed in the past few months, making the situation of farmers even more precarious.

Last week, a day after the Budget, the government removed the restrictions on onion shipments. It has removed its MEP and allowed domestic traders to ship all its varieties. 

In November last year, the government had imposed an MEP of $850 or Rs 54,000 a tonne on onions.

In the case of sugar, wholesale prices have fallen below the cost of production because of production increasing by an estimated 6 million tonnes in the 2017-18 season (October-September). 

In retail markets, sugar is being sold at Rs 40-42 a kg.

The National Federation of Cooperative Sugar Factories and the Indian Sugar Mills Association have sought government intervention because ex-factory prices of sugar have fallen below the cost of production to Rs 29.50-30 a kg.

India’s sugar production estimate has been revised to 26.1 million tonnes in the current 2017-18 marketing year (October-September) as against 20.3 million tonnes in 2016 -17, according to the industry data. 

Consumption has been pegged at 25 million tonnes for this year.

As regards chana, the wholesale price is ruling at Rs 3,700-3,800 per quintal, much below the MSP of Rs 4,400 per quintal due to a bumper harvest.

The output of pulses increased sharply to an all-time high of 22.95 million tonnes in the 2016-17 crop year (July-June) from 16.35 million tonnes in the previous year, according to the agriculture ministry data. 

In 2017-18, too, production is expected to be more than 21 million tonnes.