Farm Minister Pawar Says India May Protect Local Sugar Mills From Imports

India may protect domestically- produced sugar from duty-free imports, farm minister Sharad Pawar said, after allowing zero-tax shipments last year to boost local supplies.

“If we have to protect sugar cane farmers,” the government has to provide “level-playing field” for local mills, Pawar said, without elaborating. The government controls the sale of locally-produced sugar while imported sweetener is sold without any restrictions.

India, the world’s biggest sugar consumer, last year allowed duty-free imports after a drought in 2009 ravaged crops and cut output. Prices in Mumbai have fallen 31 percent from a record 4,050 rupees per 100 kilograms on Jan. 8 after the government extended duty-free imports of white sugar until Dec. 31 and forecast output may be more than previously estimated.

Sugar prices “are definitely going down,” Pawar said. “We have to protect sugar cane farmers.”

Balrampur Chini Mills Ltd. expects the Indian government will remove restrictions on the sale of sugar, Managing Director Vivek Saraogi said in an interview with Bloomberg UTV television channel yesterday. The company is the country’s second-biggest producer by capacity.

India’s sugar output may be 23 million tons in the year endig Sept. 30, 2011, compared with 18.5 million tons forecast this year, Vinay Kumar, managing director of National Federation of Cooperative Sugar Factories Ltd., said April 20.

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net

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