The government today extended duty-free import of sugar for two months till August-end amid inflationary pressure. The zero-duty sugar import deadline, which expired on June 30, has been extended till August 31, this year, a notification issued by the Finance Ministry said. The government had abolished import duty on sugar in February 2009 to boost domestic supply. Prior to that the import duty was 60%.

Currently, food inflation is ruling at 7.78%.

However, the sugar price in the national capital is stable and ruling at Rs 30-32 per kg, which is significantly lower than the Rs 50 per kg in January 2010.

Recently, Indian Sugar Mills Association (ISMA) had demanded that the duty-free regime on sugar import should end as “this is hurting market sentiments and sending wrong signals to the market about clarity of government policies and intentions”.

With surplus availability of sugar in India and exports taking place, it neither makes much economic sense to have a duty free regime for imports nor any commercial sense to import now, ISMA had noted.

In 2010-11 season (October-September), mills have already exported about one million tonnes to meet export obligations under Advance Licence Scheme (ALS) and are in process to ship nearly 10 lakh tonnes under Open General License (OGL).

India, the world’s second largest producer and biggest consumer, is expected to produce 24.2 million tonnes in the 2010-11 season against 18.8 million tonnes in the previous year. The annual domestic demand is 22-22.5 million tonnes.


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