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In order to promote exports with the objective of evacuating surplus stocks from the country, the Government of India has decided to remove customs duty on export of sugar from its current level of 20 percent to zero percent. This will also help in maintaining demand and supply balance and thereby stabilising the domestic sugar prices in the country.
During the current Sugar Season 2017-18, the sugar production in India is estimated to be substantially higher than the estimated domestic consumption. Sufficient surplus stock of sugar may be available for export.
According to the second advance estimate of Indian Sugar Mills Association (ISMA), India is expected to produce 261 lakh tonnes of sugar. It is significantly higher than the 203 lakh tonnes production in the sugar season 2016-17.
Considering the additional sugar availability expected in the current season of around ISMA officials had met the officials in the Ministry of Food and Public Distribution, Government of India in January this year. The sugar mills body had made detailed submissions before the Government about the need to dispose off some of the additional stocks in the current season itself. Several sugar mills were under pressure to sell their sugar for revenue generation to pay to the cane farmers and the additional production resulted into fall of sugar prices in the market.
It was also noted that several sugar mills were unable to pay sugarcane prices to the farmers due to the fall in sugar prices which have started falling below the cost of production.
It was agreed by the Government that there is need to take action to control the falling prices, for which some of the stocks could be exported as quickly as possible.