3 JAN, 2013, RITURAJ TIWARI, ET BUREAU
NEW DELHI: Cash-strapped sugar mills in Uttar Pradesh have sought a steep increase in the import duty on raw as well as white sugar from 10% to 60% to restrict large-scale imports of cheaper white sugar from Pakistan and raw sugar from Brazil.
"Due to a lower duty structure, there has been a steep rise in sugar imports despite the expected surplus production. The cheap imported sugar has dragged the prices down by Rs 300 a quintal in last few months, putting pressure on domestic sugar producers, especially from Uttar Pradesh, where the cost of production is the highest after a rise of Rs 40 a quintal in state administered cane prices," said UP Sugar Mills Association secretary S L Gupta.
The market price of sugar is ruling around Rs 3,300 a quintal and production cost for UP sugar mills is over Rs 3,620 a quintal.
"There is a difference of Rs 320 a quintal. After factoring the loss on a 10% levy, the loss to sugar factories in UP is estimated to be over Rs 3,500 crore on an estimated production of 79 lakh tonne," he said.
Due to the sharp drop in global sugar prices, overseas purchases of raw sugar for re-export and sale in the local market have gone up to 700,000 tonne since October 1, which is more than the combined imports in the previous two years.
The country is also getting processed sugar from Pakistan on a large-scale, which is at least Rs 5 a kg cheaper than Indian variety.
"Imports are likely to go up further as Indian refiners are finding it convenient and economical to process cheaper imported raw sugar. The government should immediately raise the duty to 60% to keep the Indian sugar industry competitive," said Abinash Verma, director general, Indian Sugar Mills Association, an industry body. The food ministry has already recommended that the import duty on white sugar be doubled and the decision is pending with the finance ministry.
The impact of lower realisation is visible in the sugar output of UP mills. Production in the first quarter of the new season is down by 11% at 19.25 lakh tonne as against last year's output in the state.
However, the country's overall output rose 2.5% to 7.96 million tonne backed by a 17% rise in Karnataka and a 4% increase in the output in Maharashtra mills. "UP sugar mills should get a free sale realisation of around Rs 3,700 a quintal to be able to discharge their obligation for the cane price payment," Gupta said.
NEW DELHI: Cash-strapped sugar mills in Uttar Pradesh have sought a steep increase in the import duty on raw as well as white sugar from 10% to 60% to restrict large-scale imports of cheaper white sugar from Pakistan and raw sugar from Brazil.
"Due to a lower duty structure, there has been a steep rise in sugar imports despite the expected surplus production. The cheap imported sugar has dragged the prices down by Rs 300 a quintal in last few months, putting pressure on domestic sugar producers, especially from Uttar Pradesh, where the cost of production is the highest after a rise of Rs 40 a quintal in state administered cane prices," said UP Sugar Mills Association secretary S L Gupta.
The market price of sugar is ruling around Rs 3,300 a quintal and production cost for UP sugar mills is over Rs 3,620 a quintal.
"There is a difference of Rs 320 a quintal. After factoring the loss on a 10% levy, the loss to sugar factories in UP is estimated to be over Rs 3,500 crore on an estimated production of 79 lakh tonne," he said.
Due to the sharp drop in global sugar prices, overseas purchases of raw sugar for re-export and sale in the local market have gone up to 700,000 tonne since October 1, which is more than the combined imports in the previous two years.
The country is also getting processed sugar from Pakistan on a large-scale, which is at least Rs 5 a kg cheaper than Indian variety.
"Imports are likely to go up further as Indian refiners are finding it convenient and economical to process cheaper imported raw sugar. The government should immediately raise the duty to 60% to keep the Indian sugar industry competitive," said Abinash Verma, director general, Indian Sugar Mills Association, an industry body. The food ministry has already recommended that the import duty on white sugar be doubled and the decision is pending with the finance ministry.
The impact of lower realisation is visible in the sugar output of UP mills. Production in the first quarter of the new season is down by 11% at 19.25 lakh tonne as against last year's output in the state.
However, the country's overall output rose 2.5% to 7.96 million tonne backed by a 17% rise in Karnataka and a 4% increase in the output in Maharashtra mills. "UP sugar mills should get a free sale realisation of around Rs 3,700 a quintal to be able to discharge their obligation for the cane price payment," Gupta said.
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