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Traders want import duty at 60% to counter cheap sugar from Pakistan

NEW DELHI: Traders have requested the food ministry to increase the sugar import duty from 50 per cent to 60 per cent as the drop in local prices coupled with the influx of cheap sugar from neighbouring Pakistan is spoiling the party for farmers here. 
Sugar prices have fallen by Rs 3/ kg over the past 60 days in the domestic market at a time when the sugar crushing season has just started. Sugar prices in the Mumbai wholesale market has moved from Rs 36.75/kg on November 1 to Rs 33.60/kg now, said traders. 

“We have requested the food ministry to increase the duty on import of sugar from 50 per cent to 60 per cent. With Pakistan government giving an export subsidy of roughly Rs 7/kg to export 1.5 million tonnes of sugar, we expect export of sugar from the neighbouring country to start,” said Praful Vithalani, chairman, All India Sugar Trade Association. 
Sugar, which is imported from Pakistan to Amritsar market under the bilateral trade route of Wagah-Attari, could be as cheap as Rs 27-30/kg, said traders. Vithalani said sugar from Pakistan was generally exported to India by road through the Wagha border and its transportation cost was much lower than getting sugar from Brazil. 
Customs officials in Amritsar said that traders have imported around 2,055 tonne of sugar from Pakistan since October. The rate of duty was 50 per cent and IGST was 12 per cent, they said. 
“Pakistan has excess of 2 million tonne sugar and is looking for markets to sell. Considering that global markets are down, it becomes viable for it to sell it to India at competitive rates,” said an official of a Mumbai based trading company. 
India has an opening stock of 4 million tonne at the beginning of the sugar crushing season and expected production is 25 million tonne, with consumption at 25-26 million tonne. 
Traders have also asked the government to remove the stock limit and lower current duty on export from 20 per cent to nil, said Rahil Shaikh, managing director at ED&F Man Commodities India. 
“Domestic prices have been correcting due to a bumper harvest. Pakistan has heavily subsidised export of sugar. There is no immediate threat to distort the Indian market, but we still felt that precautionary action should be taken,” said Shaikh.

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