India to Raise Import Duty to Halt Pakistani Sugar

With a view to halt the entry of less expensive Pakistani sugar, India, the world's largest sugar consumer, is considering to double the import tax on refined variety of sugar to 20 per cent, besides abolishing a levy on raw sweetener to protect domestic producers as well as encourage value-addition.

Citing the example of other countries including India, industry sources have called for fact-based analytical approach of government in the larger interest of all stakeholders, including growers, millers and consumers with a view to maximize resource transfer towards the farming sector.

Industry sources said that government should monitor sugar production and allow exports when produce is sufficient through sugar mills with a view to bail out growers. In the same way when production is short, the sugar mills can import raw sugar to fulfill the requirement of consumers. They said that raw sugar will not only remove the scarcity when production is short but also continue the industrial activities in the country, enabling the millers to pay dues to growers in time.

They said that India, the world's biggest producer after Brazil, presently imposes a 10 per cent tax on overseas purchases of sugar. “International sugar prices have fallen significantly in the last couple of months due to improved sugar production in Brazil and better production in countries like Thailand, China, Pakistan and Russia, but Pakistan has lowest rate of sweetener.

Industry sources said that the prices of Brazilian raw sugar are ruling around $500 a ton while Indian white sugar prices have climbed by around 25% in the past three months to about $680 a ton, making imports a profitable proposition.

Sources said that production in India, the world's second-largest sugar maker, is set to decline for the first time in four years, stoking a 21 per cent rally in domestic prices since the end of May after dry weather hurt crop. The rally has boosted prospects for imports and halted exports of refined sugar. Output is forecast to fall 10 per cent to 23.5 million metric tons in the year that started Oct. 1.

They said that with a view to keep the industrial process continue and control sugar export from Pakistan, the Indian government will increase duty on refined sugar. On the other hand, New Delhi will also abolish levy on raw sweetener to encourage value-addition despite shortage.

They, flaying commercial export, has said that export of sugar without quota restrictions will hurt the main objective of bailing out growers, as in this way a single mill will export the whole commodity. They said that nowhere in the world, including India, commercial export of sugar is allowed. Only sugar millers in every country are allowed to export sugar, they added.