The government’s move to raise import duty on sugar is expected to result in a spike in sugar prices in the domestic market.
Reacting to the move, sugar mills lobby said the steps would help improve liquidity in the system and benefit mills as well as the farmers.
“These key decisions would benefit the industry and improve the liquidity of the sugar mills, which would help the industry to clear the pending payments to the cane farmers at the earliest,” said Abinash Verma, Director-General, Indian Sugar Mills Association (ISMA).
Mr. Verma said the 10 per cent ethanol blending would save foreign exchange of $1.6 billion to $1.7 billion, which is a huge plus for the country as it would improve the revenue deficits.
“There is a need to improve the sugar prices to allow mills to at least cover their cost of producing sugar.
A 40 per cent duty on sugar import would ensure that no sugar from other nations makes its way into the Indian markets, as we already have about 20-25 lakh tonnes of surplus sugar with us,” said Mr. Verma.
“This would definitely improve the market sentiments, domestic sugar prices, and better buying by the traders and wholesalers,” he added.