Sugar exports unviable after imposition of 20% duty: ISMA

Sugar industry body head Abinash Verma said that the govt was making up for the expected fall in production in the next season

Sugar industry body Indian Sugar Mills Association (ISMA) today said that sugar exports have become unviable after imposition of 20 per cent customs duty but it will help in maintaining enough stock to meet the domestic demand.

The government yesterday imposed a 20 per cent export duty on sugar to curb outbound shipments, which had become viable after a sharp rise in global prices over a past few months.

"It seems that the government wants to conserve sugar domestically in view of an expected fall in sugar production in the next 2016-17 sugar season (October-September)," ISMA Director General Abinash Verma said in a statement.

"With the recent spurt in global prices, sugar exports from India was just about becoming viable but the 20 per cent export duty which translates into around $100 per ton will make Indian exports unviable," he added.

Verma said the realisation from exports would be lower than sales in the domestic markets following imposition of export duty.

Stating that there would be enough availability of sugar in the 2016-17 marketing year on the back of carry-over stocks of 7 million tonnes, Verma said the export duty of 20 per cent on sugar would "ensure a healthier opening balance for 2017-18 season".

Sugar exports from India, the world's second largest producer after Brazil, is estimated at around 1.6 million tonnes so far in the current 2015-16 marketing year.

The country's sugar output is estimated to decline to 25 million tonnes in the 2015-16 marketing year, as against 28.3 million tonnes in the previous year. The annual domestic demand is pegged at 26 million tonnes.

For the next 2016-17 marketing year, the government has forecast further decline in output at 23-24 million tonnes, although it has maintained that there would be no shortage as the country would have 30-31 million tonnes of sugar supply taking into account the carry-over stocks.