There is a surplus of sugar stocks and any price rise can easily be tackled by increasing the supply of the commodity in the market. Besides, if levies on imported sugar are increased now it does not mean that they cannot be brought down in the future if the situation so warrants.

What strengthens the case for imposing additional duties on sugar imports is the fact that exporting countries like Pakistan have been subsidising their exports, thereby giving importers an unfair advantage over domestic producers. Another discriminating factor is that while domestic producers have to mandatorily sell 40 per centof their produce to the government at administered prices, there is no such requirement for importers. As the administered prices are about 15 per cent to 20 per cent lower than the cost of production, producers suffer losses on their sales to the government.

To ensure a level-playing field especially at a time when domestic production is more than adequate to satisfy demand for the commodity, a higher duty on sugar imports is warranted. Besides, there are concerns that if large quantities of domestically produced sugar remain unsold, payments to farmers will be affected and this in turn may adversely affect the sugarcane crop in the next season. In such an eventuality, imports of sugar would become imperative but import prices would cease to be low.