The government has no plans as of now to re-impose Customs duty on white sugar or permit wheat exports, according to Food and Agriculture Minister Sharad Pawar said on Thursday.
“We will not take any decision that may affect food prices,” Pawar told reporters on the sidelines of a kharif crop conference.
He said sugar availability and production prospects have improved and prices too have eased considerably in the open market in recent weeks.
“My assessment is sugar production will cross 17 million tonnes (mt),” Pawar said.
The Indian Sugar Mills Association (Isma), which had earlier forecast sugar production for the current season at around 14-15 mt, has now raised output estimates to 16.8 mt.
In Maharashtra and Uttar Pradesh, cane productivity has increased by nearly by 10 tonnes per hectare and sucrose recovery from cane has gone up helped by late rain leading to better output forecast.
Pawar said sugar prices have weakened as production estimates have been raised. Globally too, sugar prices have fallen to $530 a tonne from a high of $790-$800 a tonne, early this year.
He said, despite a drop in global and domestic prices, the government has no plans to tamper with the import duty structure of sugar.
Pawar’s statement puts to rest speculation that government could consider re-introduction of 60 per cent Customs duty on white sugar, which had gained ground after Commerce Minister Anand Sharma on Monday told reporters that the government would review the duty-free import deadline for the commodity. Wholesale sugar prices, which had fallen to lows of around Rs 2,950 a quintal last week, have recovered to around Rs 3,200 this week on hopes of stiffer import norms.
Traders said sugar prices are likely to soften again on higher production prospects and likelihood of cheaper imports.
Wheat
Pawar said the government also has no plans to tamper with the ban on wheat exports for now, despite bulging stocks.
He said most states are facing food grain storage problems due to high stocks in the central pool and prospects of higher wheat procurement this year. But despite ample availability, the government has no plans to allow wheat exports for now. “We cannot think of exporting wheat till we are sure of ample availability... and (till) food prices stabilise,” the minister said. He said there are indications that 2010 wheat output will top last year’s record of 80.68 mt, and procurement too would be good.
In fact, the government is looking for a solution to food grain storage problems in Punjab, Haryana, Orissa, Bihar and Andhra Pradesh, which are expected to exacerbate once the new procurement season begins.
“We have already started moving out foodgrain from states...,” he said adding the government would also consider raising wheat allocation for above poverty line families and raising open market supplies to liquidate stocks.
The minister said the food department has suggested raising the wheat allocation to above poverty line families covered under the public distribution scheme, but the proposal would have to be discussed by the Empowered Group of Ministers on food prices, as it would result in a substantial financial burden.
The meeting of the ministerial panel, scheduled for on Thursday, has been deferred.
Pawar said the government, meanwhile, is yet to decide on whether to extend the March-end deadline for duty-free wheat imports.
