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Sugar producing states for ban on sugar import; seek 15%-40% duty hike
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Saturday, 18 April, 2015, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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fiogf49gjkf0d Sugar producing state governments have suggested Union government that import of sugar should be totally banned.
For this purpose, import duty should be increased from 15%-40% immediately while export incentives should be provided for the export of white sugar, according to them.
“Further, subsidies or financial assistance from the Centre to facilitate payment of the arrears should be transferred directly to sugarcane farmers while interest-free loan being provided to the sugar sector should be restructured,” they added.
The suggestions were made during a meeting of Union government attended by Ram Vilas Paswan, Union minister for food and public distribution; Radha Mohan Singh, Union minister for agriculture; Dr Sanjeev Balyan, minister of state for agriculture; and Maneka Sanjay Gandhi, minister for women and child development; and senior officials of sugar producing state governments along with their ministers.
Paswan later said, “The government will take up these suggestions with concerned ministries and take a final view in the interest of farmers and industries both.” The minister also had daylong meeting with representatives of farmers recently to discuss the issue and seek their suggestion. It was attended by 24 organisations from all over the country.
Expressing concern over pending sugarcane arrears, Paswan has called for all possible efforts be made to facilitate payment of the arrears by state governments. He said that the Centre has already taken number of initiatives to help the sugar industry and facilitate payment of arrears. He urged the state governments to take all possible initiatives at their end as well for this purpose.
Meanwhile, according to ISMA (Indian Sugar Mills Association), increasing the import duty on sugar from 25% to 40% will be helpful, but only in the longer run. The immediate problem of cash flows and the surplus sugar inventory needs to be addressed without any further delay and the request of the industry and the demand of the farmers that the government should buy 30 lakh tonne of sugar should be approved by the government. This will give around Rs 9,000 crore of cash flows to the industry, which can go directly to the farmers.
ISMA further points out, “As per the trend of sugar production upto April 15, 2015, of 263.56 lakh tonne, with around 290 sugar mills still continuing their crushing operations, it seems that the country would produce over 270 lakh tonne of sugar in the current sugar season.”
This indicates that during the current season, there would be a surplus of over 22 lakh tonne produced over the estimated domestic consumption of 248 lakh tonne. Therefore, the closing balance of September 30, 2015, with the sugar industry will be over 90 lakh tonne. This is after considering a few lakh tonne of exports, says ISMA.
ISMA stated that the domestic ex-mill sugar prices have fallen by Rs 8 to 9 per kilo in the last six months i.e. from the beginning of this sugar season. The sugar prices are at the lowest in the last seven years. These prices are below the cost of production by Rs 7,000 to 9,000 per tonne of sugar.
With cane price arrears remaining pending at Rs 19,300 crore i.e. at about 30-35% of the total price payable by the factories in the current season, the situation is alarming, ISMA said.
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