Sugar exports unviable after imposition of 20% duty: ISMA

Sugar industry body ISMA today said that exports of sweetener become unviable after imposition of 20 percent customs duty but it will help in maintaining enough stock to meet the domestic demand.

The government yesterday imposed a 20 percent export duty on sugar to curb outbound shipments, which had become viable after a sharp rise in global prices over a past few months.

"It seems that the government wants to conserve sugar domestically in view of an expected fall in sugar production in the next 2016-17 sugar season (October-September)," Indian Sugar Mills Association (ISMA) Director General Abinash Verma said in a statement.

"With the recent spurt in global prices, sugar exports from India was just about becoming viable but the 20 percent export duty which translates into around 100 USD per ton will make Indian exports unviable," he added.

Verma said the realisation from exports would be lower than sales in the domestic markets following imposition of export duty.

Stating that there would be enough availability of sugar in the 2016-17 marketing year on the back of carry-over stocks of 7 million tonnes, Verma said the export duty of 20 percent on sugar would "ensure a healthier opening balance for 2017-18 season." Sugar exports from India, the world's second largest producer after Brazil, is estimated at around 1.6 million tonnes so far in the current 2015-16 marketing year.

The country's sugar output is estimated to decline to 25 million tonnes in the 2015-16 marketing year, as against 28.3 million tonnes in the previous year. The annual domestic demand is pegged at 26 million tonnes.

For the next 2016-17 marketing year, the government has forecast further decline in output at 23-24 million tonnes, although it has maintained that there would be no shortage as the country would have 30-31 million tonnes of sugar supply taking into account the carry-over stocks.