Govt Mulls Duty Cut On Sugar Imports Amid Price Surge, Monsoon Woes

The Centre is looking at trimming its import duty on sugar as part of efforts to bring down domestic prices that have recently surged to unprecedented levels, Bloomberg reported.

Government officials are reportedly evaluating whether to reduce or do away entirely with the current 100% duty on sugar shipped in from abroad, a step aimed at easing tight local supply. The timing is significant, coming right before the festive season when sugar consumption typically climbs.

Weather Worries Weigh On Global Supply

The development comes amid growing unease over global sugar output, with traders bracing for weaker harvests linked to the El Niño pattern. That anxiety recently drove sugar futures in New York to a one-year high.

India, the world's second-largest producer of sugar, is facing its own weather-related challenges. Cane-growing belts have received rainfall running 13% below the seasonal average, data from the India Meteorological Department shows. The shortfall was far more severe earlier in the season, crossing 40% by the close of June, which pushed back sowing schedules in several areas.

Sugar mills in Maharashtra were recently selling at close to ₹46 a kilogram, a level never seen before, according to figures from the Indian Sugar and Bio-energy Manufacturers Association. Demand for sugar in India tends to rise sharply between late August and January, fuelled by festival-season consumption of sweets, snacks and beverages, the report added.

Mills To Start Crushing Ahead Of Schedule

In a bid to get supplies flowing sooner, cane mills in Uttar Pradesh and Maharashtra, the country's leading producers, are planning to start crushing 10 to 15 days ahead of their usual early-November schedule, after talks with the food ministry. Separately, the government has capped how much stock traders can hold, aiming to prevent hoarding and keep prices from spiralling further.

India rarely turns to imports to meet its domestic sugar needs, with the last major import cycle dating back to 2017-18, per ISMA figures.

Sugarcane cultivation stood at 5.83 million hectares as of August 14, a slight dip compared with the same period a year earlier, according to the farm ministry.