Amid the rising prices of the sugar, the government has relaxed a key condition on duty-free imports of 1 million tonnes of raw sugar. It has given the refiners up to 60 days from the date of filing the bill of entry to process the shipment and sell it in the domestic market.
In a separate development, the Food secretary has said that the ex-mill sugar prices down 18%.
Food Secretary Sanjeev Chopra said ex-mill sugar prices had declined by 18 per cent to Rs 55 per kg following the government’s import decision and measures against speculation and hoarding.
“Ex-mill price of sugar, which were jacked up by mills, have started cooling down. They have declined to Rs 55 per kg and will further drop in the coming days,” Chopra told news agency PTI.
Last week, Centre said it will allow duty-free imports of 1 million metric tons of raw sugar as the government seeks to bring down record-high prices.
Under the new arrangement, the centre now allows for the imports between now and October 31, ahead of India’s festival season.
What is leading to spike in sugar prices?
India is the largest consumer of sugar in the world. The country requires 270-297 LMT of sugar for the domestic market.
A fall in sugarcane harvests were reported due to the flooding in some states and poor rainfall in others, particularly in top sugarcane-producing states like Uttar Pradesh, Maharashtra and Karnataka.
The government has said that the sugar production during the current season is expected to be around 306 lakh metric tonnes (LMT), compared to the initial estimate of around 343 LMT by sugarcane-growing states.
Sugar prices in India have risen by nearly 40% in two months as lower production has tightened supplies, forcing India to import sugar for the first time in nearly a decade.