Sugar Imports in Doldrums after Dollar Rise and Duty Hike

Govt has hiked the import duty on the sweetener to 15 percent from 10 percent currently to discourage overseas buying amid a drop in local prices due to ample supplies.

The duty increase could add to global sugar stocks and pressure prices further by halting India’s sugar imports.

Food, finance and agriculture ministries have agreed to increase the duty from 10 to 15 percent.

Indian mills and traders mainly import raw sugar and sell it in the local market after refining. India has been importing sugar despite a surplus local production world market due has fallen to 37 cent per kg to a bumper sugar output in Brazil.

In New York, the front-month raw sugar contract fell to a three-year low of 16.02 cents a pound last week, weighed down by hefty global supplies.

India has imported around 700,000 tonnes sugar so far in the current marketing year that started on Oct. 1, 2012, including imports of 100,000 tonnes white sugar, Abinash Verma, director general of the Indian Sugar Mills Association, told Reuters.

Since the beginning of the season, sugar prices have fallen 14 percent in the local market.

India’s biggest sugar refiner Shree Renuka is planning to export refined sugar from its Haldia unit as returns are higher in the overseas market, Narendra Murkumbi, managing director of Shree Renuka Sugars.

India is likely to produce 24.6 million tonnes of sugar in 2012/13, an industry body has said, against an annual demand of about 23 million tonnes.