Mills Plea For Sugar Import Curbs May Go Unheard

The sugar industry, bulging with stocks, has asked the government to slap tariffs on sugar imports but expects few sops in the Union budget, industry officials said yesterday.

I am not expecting anything particular regarding the sugar industry, it is not a budget-linked industry, Shanti Lal Jain, director-general of the Indian Sugar Mills Association (Isma) told Reuters.

Jain said the sugar industry had demanded that in view of high domestic sugar stocks the government should levy a 30 per cent duty on sugar imports in the Budget. India allowed free sugar exports to augment stocks after production fell two years ago. Output has since picked up but the government has continued with the policy on free imports to keep prices under check.

Finance minister P Chidam-baram is due to present the 1997-98 (April-March) Budget to the Parliament on February 28.

Analysts said sugar was a highly politicised commodity in India and a package of measures was needed to get the best from the industry. Sugar supplies and pricing are controlled by the government.

The mills supply 40 per cent of their output as levy sugar at a subsidised rate for distribution among the poor, and sell the rest in the open market.

Industry officials say their losses are growing because there is a gap of nearly 40 per cent between open market sugar prices and the price at which the industry has to sell subsidised sugar.

India started abolishing licen-ces for many industries under a reform programme that began in 1991, but it kept sugar under the old regime, which has subsidised prices for consumers and protected producers. I dont expect anything so far as sugar is concerned because no politician understands or tries to understand the industry, said Indhubhai Patel, a senior industry official.