Govt may levy sugar import tax in August-Sept: Pawar

India, the world’s largest sugar buyer, may decide on imposing duty on imports in August or September, Farm Minister Sharad Pawar said.

The levy may be effective from the new crop year starting October 1, Pawar told reporters in New Delhi on Monday. India deferred a decision on June 25 to slap a tariff on the refined variety, citing high domestic prices, a government official said.

The South Asian nation allowed duty-free imports as prices doubled last year after dry weather reduced domestic production and excess rain damaged the crop in Brazil, the biggest grower.

White, or refined, sugar for October delivery rose as much as 2.7 per cent to $505 a tonne in London.

India has allowed duty-free imports of white and raw sugar until December 31 to bolster supplies and cool food-price inflation.

The Indian Sugar Mills Association has been seeking a tax to encourage purchases of domestic supplies that are forecast to increase enough to meet demand.

Sugar stockpiles will jump 53 per cent in the year ending September 30, according to the association. The nation will end the season with 4.9 million tonnes of the sweetener compared with 3.2 million tonnes a year ago, the producers’ group said on June 14.

Sugar production in India, the world’s biggest user, will be 24 million to 25 million tonnes in the year starting October 1 because of an increase in the area planted to cane, Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories Ltd., said in a telephone interview on July 1.

There won’t be any need to import the sweetener, he said. “If this situation continues, this is the proper time to lift control on sugar,” Pawar said.

The government controls the sugar market by telling mills how much they should sell each month.