Hike import duty on raw sugar to 60%, demands farmers' body

India consumes about 22 million tonnes of sugar annually.

Updated: Jan 08, 2013, 19:07 PM IST

New Delhi: A farmers' organisation Tuesday demanded that import duty on raw sugar be raised to 60 percent as refiners are importing the raw sweetener to cash in on subdued global prices.

"We have written to the Prime Minister urging him to raise import duty on raw sugar from 10 percent to 60 percent as millers are importing the sweetener due to low global prices," Bhartiya Kisan Union (BKU) Spokesperson Rakesh Tikait told reporters here.

In a letter written to Prime Minister Manmohan Singh, BKU has also urged him to impose a ban on import of all kinds of sugar, he said.

These imports are happening at a time when the end stock of sugar from the 2011-12 marketing season (October-September) is estimated at 6.5 million tonnes and the production in the current season is pegged at 24 million tonnes, he added.

"We have confirmed news that some Indian mills (like ED & F Man and Renuka) have signed deals to import 4,50,000 tonnes of Brazilian raw sugar from October 2012 because of low global price of sugar," BKU said in the letter.

India consumes about 22 million tonnes of sugar annually.

It is also well established that whenever India decides to import sugar, it leads to a surge in the global prices of the sweetener. India last imported sugar in 2009-10, sending global prices to a 30-year high, the letter added.

Quoting from the letter BKU General Secretary Yughvir Singh said that due to high price difference in the global market, even after calculating processing and handling costs, an importer can make a profit of more than USD 60 per tonne.

"Besides that it is also quite lucrative for them to import cheap sugar given the sharp increase in domestic price of sugar, which has climbed by around 25 percent in the past 3 months to USD 680 per tonne (about Rs 35,983), making imports a profitable proposition," he added.

It is expected that importing sugar can help in softening domestic retail prices, which are currently ruling in the range of Rs 40-50 per kg, but, the previous year's experience indicates that the huge duty free imports do not help the consumers, Singh said.

BKU also demanded that crop prices should be fixed according to the recommendation of the Hooda committee report as well as the National Farmers Commission.

The National Farmers Commission says that farmers should receive 50 percent above the cost of cultivation. These steps are urgently needed to stop farmers from committing suicide and have a dignified life in our country, it said.

The farmers' body also urged the government to keep agriculture and other areas vital for human life out of free trade agreements like foreign direct investment in multi-brand retail.

The pre-budget consultations should also include other bodies like BKU, Singh said.

"These consultations are an eye-wash. There are no real farmers' organisations invited in these meetings," he claimed.