Price rise: Govt allows duty free import of raw sugar up to 5 lakh tonnes

New Delhi: The government on Wednesday allowed duty free import of up to 5,00,000 tonnes of raw sugar to boost domestic supplies and check price rise amid production fall.

The duty-free imports will be allowed until June 12 under the Tariff Rate Quota (TRQ), according to a notification laid in Parliament.

Elaborating on the notification, a government official said that 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.

The shipment quantity for each refinery will be decided by the Directorate General of Foreign Trade (DGFT) based on the parameters such as total refining capacity, capacity utilisation in the current year and demand in a particular area, the official told PTI.

Refineries will have to apply 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 ongoing 2016-17 marketing year ending September," the official noted.

Raw sugar imports are feasible now as global prices are ruling lower at 16.2 cents per pound at present.

The sugar production in India, the world's second largest producer and biggest consumer, is estimated to be much lower than the annual requirement of 24.5 to 25 million tonnes.

Sugar production, which the government has not yet released officially, is estimated to drop to 20.3 million tonnes in the ongoing 2016-17 marketing year from 25.1 million tonnes last year because of drought.

With an opening stock of 7.7 million tonnes, the country would have 28 million tonnes of sugar this year, which is much higher than the annual requirement. There are around 29 refineries in India.