PSMA clarification

Apropos a news item "Hasty tender for procurement of sugar gives birth to doubts" carried by Business Recorder on November 12, 2011, Javed Kayani, chairman, Pakistan Sugar Mills Association, has clarified: "Government of Pakistan needs to replenish its strategic buffer stocks through Trading Corporation of Pakistan (TCP) for which it wanted to import sugar.
"Growers expressed their serious apprehensions vide their advertisement which had appeared in Business Recorder on 24th October 2011 wherein they demanded that imported sugar should not be allowed as there are still stocks in the country and that sowing of Canola, Wheat and Sunflower would be delayed if imported sugar entered the already surplus situation thereby causing delay in the start of crushing season as the industry might wait until the present stocks are exhausted.
"The bank limits availed against pledge of sugar for payments to growers still stand outstanding and require clean up before the renewal can take place which would cause further delays in payments to the growers "The sugarcane growers also envisage a bumper crop next year and expect that industry shall be able to produce about 5 million tons of sugar with estimated 54 million tons of sugarcane.
"The monthly requirement of 350,000 tons means a consumption of about 4.2 million tons and a foreseeable surplus of 700,000 - 800,000 tons of sugar. "GOP requires to keep a buffer stock of about 700,000 tons which can be met with domestic production as forecast for the forthcoming crushing. "The present stocks with industry are sufficient to last until December 2011 for the crop cycle 2010-2011.
"The landed cost of sugar is about Rs 74 - 75 per kg whereas the wholesale market rate is about Rs 63 - 64 per kg. "Ministry of Industries vide its letter dated 28th October 2011 advised Ministry of Finance for procurement of sugar from the local industry to take advantage of the lower prevailing prices.
"Through issuance of this timely tender the government would benefit to procure sugar at lower than the landed cost and save foreign exchange. The sugar industry had paid about 180 billion rupees in the year 2009-2010, 220 billion rupees in the year 2010-2011 and with the sizeable crop ahead would be paying more than the preceding years to the growers of sugarcane which by itself is a major support to agricultural sector of Pakistan. The sugar industry is obliged to crush the entire sugarcane available in the fields and in return converts sugarcane crop in the shape of Refined White Sugar which is required to be dealt with by TCP like wheat and cotton.
The strategic reserves so built can be utilised by off loading in the market in the event of any shortage and to control the price spiral as and when needed. The members of Pakistan Sugar Mills Association are the second largest employment providers in the country besides millions of families growing sugarcane are directly dependent on the well being of sugar industry. Therefore, vested criticism without taking into account the ground realities may kindly be eschewed as the purchase has been initiated keeping in view of the welfare of growers of our country who are already devastated by the recent rains and floods."