Higher global prices thwart sugar imports

Sugar companies have not availed of the sugar import quota, valid till September 30, announced by the government in June. The imports were duty free with just a CVD of Rs 850 a tonne.

None of the companies opted to import sugar as international prices were much higher than the domestic price.

On June 22, when the Cabinet Committee on Prices (CCP) allowed imports through tariff rated quota (TRQ) for 10 lakh tonne, the price of domestic sugar was Rs 18,500 a tonne, whereas imported sugar would have landed at about Rs 28,500.

At present, the average price of sugar in the domestic market is about Rs 18,000 a quintal. "Even now, when international prices have fallen, the landed cost in India would be more than Rs 22,500 a tonne. Therefore, no one has opted for imports," said S L Jain, the director general of Indian Sugar Mills Association.

Since June 22, the prices of sugar in the spot and futures markets have fallen by about 4 per cent and 7.5 per cent, respectively.

While sugar for August delivery at the National Commodities and Derivatives Exchange was trading at Rs 1941 a quintal on June 22, at present, sugar for November delivery is trading at Rs 1797 a quintal. The spot price of sugar at the Multi Commodity Exchange (MCX) fell from Rs 1,940 a quintal on June 22 to Rs 1865.

On July 4, the ban on sugar export was notified as a measure to curb rising prices of essential commodities.

41 tn free-sale stock released

The Centre has released 41 lakh tonne of free sale sugar for the October-December quarter of this year against 37 lakh tonne during the corresponding period last year.

This is aimed at maintaining the retail sugar price at reasonable level. For, free-sale sugar quota released is 16 lakh tonne, which, needs to be sold within the month. Any unsold quantity at the close of month would be converted into levy sugar.