New Delhi : The Food Ministry is considering revoking its order for compulsory export of 3.2 million of sugar and is open to lower import duty in order to keep prices of the sweetener under control.
The government had asked sugar mills to export 3.2 million tonne (MT) in the current 2015-16 marketing year to offload surplus stock in the domestic market that depressed local prices. The mills have exported about 1.4 million tonnes of sugar so far and are likely to ship only 1.5 million tonnes by the end of September with exports being virtually stopped.
“The government is considering to revoke compulsory sugar export order as exports are not happening because of not- conducive prices. In fact, despite the policy decision, the government had to push mills for exports,” a source told PTI.
“There are sufficient sugar stocks in the country for the current and even next year. Physical imports of sugar are not required but if there would be any manipulation and artificial spike in sugar prices then government is open to tweak import duty,” the source added. At present, there is 40% import duty on sugar.
Sugar production of India, the world’s second largest producer after Brazil, is estimated to decline to about 25 MT in 2015-16 marketing year (October-September) as against 28.3 MT last year. The cane crop has been hit by two successive droughts in Maharashtra and Karnataka.
With retail sugar prices crossing Rs 40 per kg, the Cabinet, last week, had given its approval to bring sugar under the purview of stock holding limit to rein in spiralling prices of the commodity in domestic market and check hoarding by wholesalers and retailers.
Meanwhile, the government has fixed stock limit of 500 tn and turnover limit of 30 days for sugar traders in the country, a senior government official told Cogencis.