More sugar imports may be needed to avert shortage.

Centre has woken up to the emerging tightness in the domestic availability of sugar and has permitted refiners and millers to import up to 5 lakh tonnes of raw sugar duty-free, but the measure may be inadequate to ease the strain in the coming months. The country economic outlook for 2017-18, sugar demand is expected to increase, breaking out of the sluggishness arising from recent events such as demonetisation. Given the enormity of the expected shortage, there is a felt need for the import of an additional 15-20 lakh tonnes in order to contain the risk of a price spiral and diffuse the adverse fallout of the market’s regional concentration. Spot prices are slightly higher than forward rates.