AGL 38.40 Increased By ▲ 0.24 (0.63%)
AIRLINK 133.99 Decreased By ▼ -0.20 (-0.15%)
BOP 9.01 Increased By ▲ 0.16 (1.81%)
CNERGY 4.74 Increased By ▲ 0.05 (1.07%)
DCL 8.89 Increased By ▲ 0.22 (2.54%)
DFML 39.85 Increased By ▲ 0.07 (0.18%)
DGKC 85.24 Increased By ▲ 0.09 (0.11%)
FCCL 34.60 Decreased By ▼ -0.30 (-0.86%)
FFBL 75.74 Increased By ▲ 0.14 (0.19%)
FFL 12.76 Increased By ▲ 0.02 (0.16%)
HUBC 110.30 Increased By ▲ 0.85 (0.78%)
HUMNL 14.51 Increased By ▲ 0.41 (2.91%)
KEL 5.45 Increased By ▲ 0.05 (0.93%)
KOSM 8.09 Increased By ▲ 0.34 (4.39%)
MLCF 41.00 Decreased By ▼ -0.37 (-0.89%)
NBP 70.25 Increased By ▲ 0.55 (0.79%)
OGDC 193.00 Decreased By ▼ -0.62 (-0.32%)
PAEL 27.35 Increased By ▲ 1.14 (4.35%)
PIBTL 7.50 Increased By ▲ 0.08 (1.08%)
PPL 164.70 Increased By ▲ 0.85 (0.52%)
PRL 26.35 Decreased By ▼ -0.01 (-0.04%)
PTC 20.50 Increased By ▲ 1.03 (5.29%)
SEARL 88.50 Increased By ▲ 4.10 (4.86%)
TELE 7.88 Decreased By ▼ -0.11 (-1.38%)
TOMCL 35.20 Increased By ▲ 1.15 (3.38%)
TPLP 9.00 Increased By ▲ 0.28 (3.21%)
TREET 17.16 Decreased By ▼ -0.02 (-0.12%)
TRG 60.10 Decreased By ▼ -0.90 (-1.48%)
UNITY 31.25 Increased By ▲ 2.29 (7.91%)
WTL 1.37 No Change ▼ 0.00 (0%)
BR100 10,791 Increased By 15.6 (0.15%)
BR30 32,449 Increased By 215 (0.67%)
KSE100 100,339 Increased By 256.3 (0.26%)
KSE30 31,184 Decreased By -9.1 (-0.03%)

Indian authorities are expected to hold off before cutting or cancelling a 40 percent raw sugar import duty as a last resort to tackle surging domestic prices as the country shifts from net exporter to importer. Soaring domestic sugar prices in the world's second-biggest producer, where drought has cut yields in the main growing regions such as Maharashtra, mean that mills will increasingly spurn the export market. The south Asian nation's production in the current year ending September 30 is likely to drop following two drought years in a row.
The federal government has asked state governments to impose stock limits on sugar to avoid hoarding by traders. Traders spoke of market talk that India could move to either reduce or cancel the raw sugar import duty. However, no imminent action was expected.
"I don't think the government will scrap the import duty any time soon," said Rohit Pawar, chief executive of Baramati Agro, which operates sugar mills in Maharashtra. "Yes, sugar prices have risen in the past few months but now they are running just above production cost. In the past few years mills have incurred huge losses as they were forced to sell sugar below production cost. "In such a situation duty-free imports can depress local prices and cane payment arrears will start rising."
A government official, who declined to be identified, said, "Right now there is no proposal (to scrap the import duty) on the table." A Mumbai-based dealer with a global trading firm said the government had to maintain a delicate balance between the interests of farmers and consumers. Aggressive steps to dampen prices, such as a cut in the raw sugar import duty, could damage the central government's image among farmers.
"Duty-free import is the last weapon the government has to control price rises," the dealer said. "It will do it in phased manner. From 40 percent, it will first reduce the duty to 20 percent. If prices rally even after the reduction, only then it will allow duty-free imports." European traders said they also doubted that Indian authorities would move soon to cut or cancel the duty, as stocks in India were sufficiently high to make such a move unnecessary for now.

Copyright Reuters, 2016

Comments

Comments are closed.