India allows duty-free sugar imports till June 2017

The central government on Wednesday allowed duty-free imports of 5,00,000 tonne of raw sugar to ease out pressure on the supply, which has been affected due to sharp fall in domestic sugar production.

Furthermore, southern ports will be allowed to import 3 lakh tonnes of raw sugar, western ports 1.5 lakh tonnes and eastern ports 50,000 tonnes.

This duty-free import will be allowed till June 2017 under the Tariff Rate Quota (TRQ).

India is the world's second largest producer and biggest consumer of sugar. The sugar production in India, is estimated to be much lower than the annual requirement of 24.5 to 25 million tonnes. Sugar production is expected to be at 20.3 million tonnes for the 2016-17 marketing year as compared to 25.1 million tonnes last year.

As per media reports, the Directorate General of Foreign Trade (DGFT) will decide the shipment quantity for each refinery, based on factors such as total refining capacity, capacity utilisation in the current year and demand in a particular area.

Additionally, refineries will have to file application with DGFT for undertaking imports. The cap on import quantity has been kept so that there is no adverse impact on next sugar marketing year and there is check on speculation during the end of the current 2016-17 marketing year ending September.

Moreover, from start of December till date, sugar price is heading northward and during same period price has inched up by 11 per cent. This move of government is expected to bridge the existing gap between demand and supply and thereby may also help sustaining sugar prices.