Zero-duty sugar imports a breather for food cos

MUMBAI: Companies, which use sugar as a key input for their food products, are relieved by the government's decision to relax sugar import norms. The government has allowed the import of refined sugar at zero duty till December 31 this year. The move could bring down sugar prices by up to 10%. Earlier, this facility was only available for importing raw sugar. (Watch)

‘‘ We expect a 10% reduction in sugar prices. The move is a relief for food companies which use sugar as a raw material. For Rasna, sugar is the second most important raw material after fruits,'' said Piruz Khambatta , CMD, Rasna. According to Angel Broking analyst Anand Shah, ‘‘ The move will certainly arrest the rise in price. Companies like Nestle, Britannia and ITC would stand to benefit.''

Sugar prices had last week touched a record high of over Rs 4,200 per quintal in certain wholesale markets , putting enormous margin pressure on the makers of soft drinks, biscuits, confectionery and ice creams. The retail price for the consumer had shot up to almost Rs 45 per kilo.

On Wednesday, the government announced relaxation of norms for importing raw sugar, stating that the same could be refined anywhere in the country. Raw sugar imports attract zero duty if it is refined at certain mills.