Government is considering raising import duty on sugar from 40% to 60% in order to restrict cheap shipments and maintain domestic prices. The prices in the international market are falling and some traders are keen to import even at high customs duty. Any fall in local prices will affect millers' capacity to pay cane dues to farmers.
The government had in April allowed import of 5 lakh tonnes (LT) of raw sugar at zero duty to boost domestic supply. This step was taken in view of lower sugar output estimated during the current 2016-17 marketing year.
The higher duty will be imposed the moment there is further fall in global sugar prices to ensure cheap imports do not put pressure on domestic retail prices. Already, 5 LT of sugar have been contracted at zero duty and most of it has already arrived.