The government on Monday raised the import duty on sugar to 50 per cent from 40 per cent to discourage dumping of cheaper supplies from abroad and as local prices stabilise after a spike earlier this marketing year.
The move will improve the ability of sugar mills to pay farmers for their supplies of cane, according to the sugar industry.
Relief for producers:
- The hike in the duty comes as a relief for mills amid slowing domestic demand, especially after demonetisation.
- Cost of production has also increased due to high cane prices.
- This will help the sugar industry pay the cane price (fair and remunerative price), which has been raised by 11 per cent for the marketing year starting October 2017.
- In April this year, the government had allowed duty-free imports of raw sugar up to five lakh tonnes to improve domestic availability.
- It was due to fear that a drop in domestic output in 2016-17 could trigger a spiral in prices to irrational levels.
This was for the first time since 2012 that imports of sugar under the open general license (OGL) was allowed at zero duty, albeit in limited quantity
Source: The Hindu