Govt reallocates 92k tn raw sugar import quota to south mills

The government has reallocated the raw sugar import quota of 92,000 tonnes surrendered by a dozen South Indian mills and the shipments are expected from mid-October onwards, a senior food ministry official said.

On September 7, the government had allowed import of 3,00,000 tonnes of raw sugar at a concessional 25 per cent import duty to boost supply in southern India. The import quota was allocated to only southern mills.

Otherwise, the import duty on sugar is 50 per cent.

"Around 41 mills showed interest to import. We allocated the raw sugar import quota of 3 lakh tonnes as per the rule. But 11-12 mills surrendered 92,000 tonnes, saying it is not viable. We have reallocated that quantity now," a senior ministry official told PTI.

Global prices of sugar are still comfortable to import and some mills have placed orders and shipments will start arriving from mid-October, he said and added that imports have been allowed to those mills/refiners that have their own capacity to convert raw sugar into refined one.

The import has been allowed keeping in mind South India's sugar demand during the crucial festive period until the new crushing season that begins after Diwali, he added.

The shipments have been permitted through the ports of Tuticorin, Karaikal, Chennai, Mangaluru, Kakinada, Gangavaram and Visakhapatnam in south.

In the 2016-17 season ending this month, sugar output is estimated to have declined to 20.3 million tonnes, from 25 mt in the previous year.

The shortfall in southern states, especially in Tamil Nadu and Karnataka, is more because of drought in some pockets.

Retail prices of sugar in most places are ruling at Rs 42 -43 per kg and the government is closely monitoring the movement.