Sugar co-ops want restrictions on import, with export subsidy

At present, sugar imports via open general licence route are permitted at 10% duty

Burdened by rising sugar imports, impacting their price realisation and payment of dues to cane growers, the National Federation of Cooperative Sugar Factories (NFCSF) has sought a rise in the tariff on both raw and refined sugar to 30 per cent.      

At present, sugar imports via the open general licence (OGL) route are permitted at 10 per cent duty. Sugar imports should also be taken off OGL, says the letter to the Union food and agriculture ministries from NFCSF President Kallapa B Awade.

Traders have imported 468,000 tonnes in the ongoing 2012-13 sugar season (October-September), he said, adding some imports were also coming from Pakistan. This is despite their estimation of sugar production exceeding demand, of 25 million tonnes versus 22.5 mt, respectively.

Taking imports into account, opening stock in the next year would be 9.7 mt. “Considering the initial three months requirement for 2013-14 of about 5.8 mt, India will have a net surplus of 3.86 mt,” it said. The surplus cannot be exported as international prices are ruling lower. If imports are continued at lower duties, domestic prices will further fall, hitting realisation and timely payment to cane growers, says the letter.

“It is becoming very difficult for factories...cane price arrears are mounting and reached Rs 12,600 crore up to March 15,” the NFCSF said. The body also wants the government to give export subsidy to ship surplus sugar, saying it would help them clear their cane arrears.

Ex-factory realisation has been falling since October 2012. The all-India average ex-factory price in October was Rs 3,328.7 a quintal. It was down to Rs 2,925 a quintal last month.