With India’s sugar production set to exceed domestic demand, the government today allowed the zero duty regime on sugar imports to lapse, restoring the 60 per cent duty on the sweetener.

Import duty on sugar was abolished in early 2009 to boost domestic supply as there was a shortfall in output in 2008-09 sugar year (October-September). Before that, the duty on sugar import was 60 per cent.

The duty-free regime was valid till today.

“There is no need for a fresh notification with the valitidy of duty-free import notification (on sugar) lapsing today. It will automatically revert to 60 per cent duty. If required, we can seek a reduction in duty later,” a senior government official told reporters.

India had imported about six million tonnes of sugar since February 2009 to meet domestic demand. Sugar production of India, the world’s second largest producer, had declined to 14.7 million tonnes in 2008-09 against the annual domestic demand of 23 million tonnes.

In 2009-10, the production improved to 19 million tonnes, but it was still short of demand.

However, in the current sugar year, the production is expected to rise to 24.5 million tonnes and the country has now begun exporting the sweetener. Prices have also softened to Rs 30-32 per kg in the national capital from nearly Rs 50 per kg in mid-January.

Asked if the government would revise its sugar production estimates for this year due to recent unseasonal rains, the official said: “Sugar production forecast remains at 24.5 million tonnes. The recent rain may not adversely impact output. The production losses may be offset with higher recovery.”

On sugar export, the official said the government will notify the procedures for export of five lakh tonnes of sugar under the open general licence (OGL) scheme next week.

Food and Agriculture Minister Sharad Pawar had announced that the government will allow regular export of five lakh tonnes of sugar to benefit from high global prices.

He had also said that the Food Ministry will work out the export procedures in 10 days.

OGL is a permit the government gives to mills to export sugar without any restriction and conditions.

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