The Indian Sugar Mills Association (ISMA) has asked the Government to bring down the time gap between raw sugar imports and export of refined sugar from 18 months to three months. ISMA’s suggestion has been made to reduce the overall piling up of sugar inventory, which has been putting pressure on the prices.
Abinash Verma, Secretary-General,ISMA, told BusinessLine that under the current system (advance authorisation scheme) refiners have 18 months time after importing raw sugar at zero duty for re-exporting it in refined form.
Om Prakash Dhanuka, CMD of Riga Sugar, has alleged that this is indirect dumping of sugar. “It is depressing the domestic prices by inflating the stock.”
Dhanuka made specific allegation that Shree Renuka Sugars Ltd imported 40 lakh tonnes of raw sugar in the past two years and exported just 18 lakh tonnes of refined sugar. “Some of the imported raw sugar got into the domestic market increasing the season-end stock by about 25 per cent and depressing the sugar price in the domestic market substantially,” Dhanuka said.
When contacted by BusinessLine , Narendra Murkumbi, Managing Director of Shree Renuka Sugars, denied the allegation and said that Dhanuka has been making this allegations based on incorrect numbers for some time. “DGCIS has the figures of import and export figures. ISMA looked into the allegations and found out different numbers,” he said.
Dhanuka said that though ISMA came up with a different set of figures, it pitched for substantial timeframe for cutting the time to export refined sugar.
Renuka sugar is largest importer of raw sugar and exporter of refined sugar. Dhanuka said it has been importing raw sugar from its Brazilian facilities.
Dhanuka said, according to ISMA, the total raw sugar export for the year 2012-13 and 2013-14 was 25 lakh tonnes, out of which 7 lakh tonnes is under export incentive and the remaining 18 lakh is under re-export obligation of advance scheme. “Even if you take the ISMA figure as correct, 10 lakh tonnes of additional sugar has flooded the domestic market,” he said.
Dhanuka said that sugar industry was bleeding because of higher cane purchase price than the sugar price realisation. He urged the Government not to make clearing cane price arrears conditional for bringing in the cane-sugar price parity in the short term and raise import duty on sugar to 40 per cent from the present 25 per cent.