Govt plans sugar import tax in 2010/11 - Pawar

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NEW DELHI (Reuters) - The government plans to impose a tax on white sugar imports in the new season that starts in October, but it will wait until it gets a clear picture of the cane crop in the next two months, Farm Minister Sharad Pawar said on Monday.

India allowed tax-free imports of sugar last year to calm soaring prices and overcome a domestic shortfall as farmers had reduced cane planting and the crop was damaged by a severe drought.

However, sugar prices have fallen and Indian millers say imports would be cheaper than local output unless the government levies a tax again.

"We will take a decision on sugar import tax before the current season ends in September. The new import tax on sugar (would) be implemented from the new season," Pawar told reporters.

The June-September monsoon rains are a key influence on cane output, particularly in Uttar Pradesh.

Rainfall was 16 percent below normal in June, but has revived sharply in the past week.

"The total picture on cane will be clear in August-September," Pawar said.

The government is also considering reversing its earlier decision to increase the amount of sugar millers are forced to sell to official agencies at low state-set prices for welfare schemes.

(Reporting by Ratnajyoti Dutta; editing by Surojit Gupta and Alison Birrane)