India's sugar mills, refiners seen importing just half of duty-free quota

Business Recorder reported, citing industry officials who spoke to Reuters, that Indian mills and refiners will probably take in roughly half of the duty-free allowance of 1 million metric tons of raw sugar approved by New Delhi. The concession, announced last week, runs to October 31 and was meant to cool prices at a record high before the festive period. Since then, domestic ex-mill prices have fallen nearly 20% from that peak, eroding the appeal of imported supplies.

Rahil Shaikh, managing director of MEIR Commodities India, said imports looked attractive when prices were firm, but the steep decline has taken away their appeal for millers. He added that the margin is slim and cannot be guaranteed by the time cargoes land in nearly two months. A group of five market participants, including Shaikh, expects arrivals to stay under 500,000 tons, with refineries likely to take up most of that volume.

Refiners, which import raw sugar duty-free and export the white sugar they produce, can apply for the quota to sell refined product locally through October. A dealer at a global trading house said these plants could quickly sell about 300,000 tons they hold. Domestic supply is expected to rise from mid-October, and mills have been told to start crushing cane by October 15. The dealer also said duty-free white sugar imports should be allowed alongside raw sugar to speed up supplies.