Duty on imported sugar will help stabilise prices: MawanaMay 9th, 2010 - 1:07 pm ICT by IANS
New Delhi, May 9 (IANS) The government should at the earliest levy duty on refined sugar being imported into country as it will not only stabilise the sweetener’s prices but also help the industry cut its losses, said a top official of a sugar company.
“Due to speculation in the market that the government may impose tax, there is a great volatility in the prices. The imposition of import duty will not only help check excessive import of cheap refined sugar but will also lead to sugar prices stabilising,” said Sunil Kakria, managing director of Mawana Sugars, in an interview to IANS.
The government last year allowed duty-free import of sugar and fixed limits on stocks for bulk consumers like icecream and biscuit manufacturers in a bid to bring down retail prices which had gone up over Rs.50 per kg.
But now as the international sugar prices have fallen, huge quantities of sugar are being imported.
“We in the industry apprehend that it will not only affect us but also the consumers as well as the farmers,” said Kakria.
The government has said it would consider imposing duty on imported sugar in September after assessing sugar production in the next season and the monsoon.
“The monsoon is likely to be good. So with the improved outlook for the next crop, we do not see the prices going up. We are expecting the domestic production in the current season (October 2009-September 2010) to be around 18-18.5 million tonnes, which is good enough. So duty-free import of refined sugar is no longer needed,” he argued.
The sugar prices are now hovering around Rs.28-29 per kg, well below the cost of production which is said to be Rs.34-36 per kg.
The government has already announced the easing of stock holding limit for bulk consumers from May 20 by allowing the large users to stock sugar for 15 days of their consumption, he said, adding that the imposition of import duty will further help solve the industry’s problems to a great extent.
On the outlook for the next season (October 2010-September 2011), Kakria was hopeful of sugar production in India breaching the 25 million-tonne mark.
India is the world’s top consumer of sugar and the biggest producer behind Brazil. The sugar output stood at 14.7 million tonne during October 2008-September 2009 season. It is estimated to be around 18-18.5 million tonnes in the current season.
Mawana Sugars is also engaged in manufacturing and selling of chemicals and edible oils. Kakria said his firm has plans to launch its sugar brand ‘Mawana’ and corn oil ‘Cornola’ in western India by this year-end.
“We are still a brand of north India. By this year-end, we plan to launch ‘Cornola’ and ‘Mawana’ in western India and from there we aim to have a pan-India presence by next year,” he said.
The company is aiming to take its retail business turnover to over Rs.250 crore by 2013 from the present Rs.90 crore, Kakria added.
The company has three sugar production units in Uttar Pradesh with an aggregate capacity of 29,500 tonnes crush per day.
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