Sugar import to stop after custom duty hike: Pawar

Hike in sugar import duty to 15 percent will halt shipments and boost domestic sales helping millers to clear Rs 9,000 crore outstanding payments to cane farmers, Agriculture Minister Sharad Pawar said Wednesday.

New Delhi: Rejecting industry demand for a further hike in sugar import duty, Agriculture Minister Sharad Pawar today said 15 percent duty would halt inward shipments and boost domestic sales, helping millers clear Rs 9,000 crore cane arrears to farmers.

Import duty on sugar was raised to 15 percent from 10 percent yesterday, as against the industry demand of 40 percent.

Pawar also expressed confidence that there would not be any shortfall in production in the 2013-14 marketing year starting October. Rather, the country will have surplus sugar for exports, he said.

"Import of sugar will stop now. It (duty hike in sugar import) is a good thing because so much sugar is lying in godowns of millers and there are no takers. In such a situation, at least we can protect our farmers," Pawar said when asked about impact of duty hike.

The outstanding payments to cane growers is around Rs 9,000 crore, mostly in Uttar Pradesh, he added.

Asked if there is scope for further hike in sugar import duty, he said: "Not necessary. It is not viable to import at 15 percent."

Terming government's move as "too little and too late", Indian Sugar Mills Association (ISMA) had said that "there is so much sugar within the country that the import duty needs to be raised to such a level of around 30-40 percent to totally check any kind of sugar import".

The country has imported nearly 6,00,000 tonnes of raw sugar and another 1,00,000 tonnes of refined sugar so far in 2013-14 marketing year (October-September), according to industry. The imports have been putting pressure on domestic prices, making it difficult for millers to clear cane arrears.

On industry's projection of 5 percent fall in sugar production in 2013-14, Pawar said: "There should not be any shortfall and we will be in a position to export. There is sufficient carry over stock. The domestic demand is only 21-22 million tonnes."

ISMA has projected the production in 2013-14 to be at 23.7 million tonnes, against 25 million tonne in the current marketing year.

On likely fall in cane output in Maharashtra, he said, "I don't think so. Maharashtra has started growing early cane varieties and sowing will improve in the coming weeks."