No impact of raw sugar import on prices, says ICRA

Economic Times– 12 September 2017: HYDERABAD: The Central Government’s recent move of permitting raw sugar import of 0.3 million ton (MT) at a concessional duty of 25% to check the rise in domestic sugar prices ahead of the forthcoming festive season is unlikely to have any significant impact on sugar prices or profitability of the sugar mills, said ratings agency ICRABSE -1.67 %.

Through a notification issued in August 2017, the government also imposed a stock limit on sugar mills for September and October 2017 to keep prices in check during the festive season. Under these limits, a mill cannot hold more than 21% and 8% of its total sugar availability for the entire 2016-17 marketing year at the end of September 2017 and October 2017, respectively.

He explains that the closing stocks for current season are estimated to be around 4.7 MT including the 0.3 MT of imported sugar, which would just be sufficient to meet the requirement of around two months of domestic consumption.

The government had earlier announced a hike in the import duty during July 2017 from 40% to 50% in order to curb dumping of sugar in India as international prices fell.