Duty-free white sugar import extended; output seen at 16 MT

NEW DELHI: The government will extend the period of duty-free refined sugar import by over a year till December 2010 to help check domestic prices as projected sugar output at 16 million tonnes this season will fall short of demand.

The Centre has also decided to tweak the method of fixing price of sugar sourced from mills for the public distribution system (PDS) to ensure supply to the poor at a time when open market prices have almost doubled in a year to Rs 36 a kg. India needs about 23.5 million tonnes of sugar to meet its annual requirement.

"Sugar production this season (starting this month) is likely to touch 16 million tonnes. So, the situation is tight. But requirement will definitely be met... (Duty-free) refined sugar import has been extended till December 2010 (from November-end 2009)," Food and Agriculture Minister Sharad Pawar said here today.

The country has contracted to import seven lakh tonnes of refined sugar so far, of which three lakh tonnes have already landed, according to a senior government official.

Pawar said the Cabinet has also decided to put in place a new system whereby states paying more for cane than the Centre's benchmark rate would have to shell out money in sugar procurement for the PDS, technically called levy sugar, in sync with the rise in their own cane rate.