The government on Thursday extended the time line for importing up to five lakh tonnes of duty-free raw sugar under open general license from June 12 to June 30. “This would mean that prospective mill/refiner can complete the import of raw sugar on or before June 30, 2017,” the food ministry said in a statement. Further, to facilitate imports from logistic point of view, Vishakhapatnam (Andhra Pradesh), Gangavaram (Andhra Pradesh) and Karaikal (Puducherry) ports in the southern zone have been added to the ports already notified, it added.
However, the zone-wise import quantity restrictions will remain unchanged. Mills and refiners in southern zone can import a maximum of 3 lakh tonnes, followed by those on western zone (1.5 lakh tonnes) and eastern zone (50,000 tonnes).
“In order to ensure timely availability of sugar in the country and to maintain domestic price at reasonable level, the importing mills/refineries have been given a timeline of two months from the date of bill of entry or the date of entry inwards, whichever is later, to convert raw sugar into white/refined sugar in their respective mills/refineries,” the ministry said.
Last week, the government had approved the duty-free imports of only raw sugar to keep domestic supplies steady amid a drop in production. However, imports of raw sugar beyond the stipulated quantity and the deadline will, however, attract the 40% duty that has been imposed since April 2015.
This is for the first time since 2012 that imports of sugar under the open general license (OGL) will take place at zero duty, albeit in limited quantity.
Imports of raw sugar at zero duty will allow a mill or a refiner to sell the sweetener in the domestic market at roughly Rs 3-4 per kg lower (after refining it) than the current ex-mill price of white sugar.
At Wednesday’s international raw sugar price, the cost of refined sugar in India out of imported raw will work out to around Rs 31-32 per kg, if the sweetener is allowed at zero duty. The ex-factory price of domestic white sugar currently stands at around Rs 35-36 per kg.
Sugar production has been hit hard by dry-spells in Maharashtra and Karnataka, although Uttar Pradesh has witnessed a bumper production in 2016-17. The decision on limited duty-free imports comes barely three weeks after the announcement of the result of the assembly polls in Uttar Pradesh, which has been the traditional epicentre of massive cane arrears due to the state government’s arbitrary fixation of cane prices.