NEW DELHI (Commoditiescontrol) - The Centre on Tuesday doubled import duty on sugar to 100 percent from 50 percent and raised duty on chana to 40 percent from 30 percent to curb cheaper shipments and ensure remunerative prices to domestic growers that have fallen sharply in view of record domestic production.
The notification issued by the Central Board of Excise and Customs (CBEC) mentioned, "Seeks to increase import duty on all types of sugar under tariff head 1701, [Raw sugar, Refined or White sugar, Raw sugar if imported by bulk consumer] from the present 50% to 100% (Tariff rate) with immediate effect and without an end date".
The government had on July last year increased import duty on sugar to 50 percent, up from 40 percent, to restrict cheap inward shipments and maintain domestic prices.
The sugar industry has been demanding hike in import duty as ex-mill rates have fallen 17 percent in the local market since the start of the marketing year on Oct. 1, making it difficult for mills to pay farmers the 11 percent hike in cane prices.
India, the world`s second-biggest sugar producer, requires processors to pay cane farmers within two weeks of the harvest.
India's sugar production estimate has been recently revised upwards by 4 percent to 26.1 million tonnes (MT) in the current 2017-18 marketing year (October-September) as against 20.3 MT in 2016-17, as per industry data. The consumption is pegged at 25 MT for this year.
The hike in import tax could halt sporadic imports from neighbouring Pakistan, which has been giving a subsidy for the foreign sales. Although imports from Pakistan haven’t really taken place so far, the government wants to raise the duty to a prohibitive level for fears that cheaper dumping will only dampen the margins of mills at a time when local prices are, in any case, ruling below costs, and add to cane arrears.
Industry sources said the landed cost of Pakistani sugar would be around $315 per tonne (after subsidy) in Mumbai if no import duty is imposed on it. This is much lower than sugar prices in Mumbai (Rs 28,500 or around $445 per tonne), even though the rates in the local markets have dropped 15-20 percent since the third week of October to below cost.
Pakistan, last year, had allowed export of 2 million tonnes of sugar with a freight subsidy of 10.70 Pakistani rupee per kg (1 Pakistani rupee = 0.58 rupees). On Dec 4, the local government in Pakistan's Sindh province had granted additional sugar export subsidy of 9.30 Pakistani rupee per kg for exporting surplus sugar, according to a report.
Pakistan is expected to produce 8 million tonnes sugar in the ongoing season ending September, as against an estimated consumption of 5 million tonnes.
Import Duty Hike on Chana (Chickpeas)
In case of chana, the government has raised import duty to 40 percent as it wants to contain inward shipments in view of record production of pulses to nearly 23 million tonnes this year.
The notification issued by the Central Board of Excise and Customs (CBEC) mentioned, "Seeks to increase BCD tariff rate on Chana (Chickpeas), [Tariff item 0713 20 0] from 30% to 40% by invoking section 8A (1) of the Customs Tariff Act, 1975 and accordingly, the effective rate of BCD on Chana (Chickpeas), will also be 40%".
Already, the government has imposed quantitative restrictions on many varieties of pulses. The government had earlier on December 21 last year imposed a hefty 30 percent import duty on chana and masoor dal to protect interest of farmers.
Meanwhile, chana sowing rose by 8.28 percent to cover 107.34 lakh hectares of area so far in the ongoing rabi (winter-sown) season, as per Agriculture Ministry data.
As per the government data, the country has imported 50.8 lakh tonnes of pulses during April-December of this fiscal, while it has 1.8 million tonnes of pulses in its buffer stock.
Pulses output increased sharply to an all-time high of 22.95 million tonnes in 2016-17 crop year (July-June) from 16.35 million tonnes in the previous year, as per the agriculture ministry data.
"India imports pulses and edible oils to meet the gap between domestic production and demand. Pulses and edible oils in India are imported by private sector and not by the government," Minister of State for Agriculture Gajendra Singh Shekhawat said in a written reply to Lok Sabha.
He said the production of pulses has increased from 17.15 million tonnes in 2014-15 to 22.95 million tonnes in 2016-17.
As per data submitted by the minister, pulses import stood at 50.8 lakh tonnes valuing Rs 17,280 crore during April-December period of 2017-18 fiscal.
During 2016-17 fiscal, 66.08 lakh tonnes worth Rs 28,523 crore pulses were imported, while imports stood at 57.97 lakh tonnes worth Rs 25,619 crore in 2015-16 and 45.8 lakh tonnes worth Rs 17,062 crore in 2014-15.
Shekhawat said 3.79 lakh tonnes of pulses were imported by the government in 2015-16 to create buffer stock when the availability of commodity was less and domestic prices were high.
(By Commoditiescontrol Bureau; +91-2-40015533)
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