Government may not encourage sugar import: current output, TCP stock enough to meet demand

The federal government may not encourage import of white sugar as local production and stocks with the Trading Corporation of Pakistan (TCP) are sufficient for next year's requirements, sources in the Ministry of Industries and Production (MoI&P) told Business Recorder here on Sunday.
"Pakistan's total requirement is about 4.2 million tons annually, which can be met with the production of local sugar mills and 0.4 million tons stock of the TCP," they said.
This issue was also discussed at the recent meeting of Economic Co-ordination Committee (ECC) of the Cabinet on January 13, 2011.
According to official documents, the TCP briefed the ECC about the progress of lifting of sugar allocated to the provinces and AJK, Gilgit Baltistan(GB) and Islamabad Capital Territory (ICT).
It was stated that due to declining trend in prices of sugar prices in the open market, the provinces had stopped lifting their remaining quota of sugar.
The ECC was also informed that reminders to all provinces had been issued requesting them to lift the allocated quantities of sugar expeditiously, to stabilise prices.
One of the views was that if the provinces did not lift the quota of sugar, it may be sold in the open market through open competitive bidding.
It was also viewed that production of sugar in the present season would be less than the demand. Therefore, it would be appropriate that the sugar in TCP's stocks may be kept for further use so that expected shortage of sugar could be met effectively.
Sources said that Ministry of Industries and Production has also issued specific instructions to all provinces including governments of AJK and GB to devise a mechanism to check and maintain sugar prices.
The ECC directed the MoI&P to review the matter at the earliest, and devise a mechanism, and bring it before ECC in its next meeting for appropriate decision.
When contacted, Chairman of Pakistan Sugar Mills Association (PSMA), Javed Kayani, told Business Recorder that he had urged the government to impose 25 percent regulatory duty (RD) on imported sugar to save the local sugar industry from collapse.
"I have written a letter to Minister for Industries, Mir Hazar Khan Bijarani, stating that since the inception of crushing season 2010-2011 the price of sugarcane has risen phenomenally, thereby causing corresponding increase in the cost of production of sugar. PSMA foresees a production of about 3.7 million tons to 3.8 million tons of sugar at the end of the crushing season which implies that the government has to import only 0.4 million tons of sugar," he said.
"Sugar cost of production at current prices of sugarcane is Rs 85 ex-mill approximately and after the close of crushing season the cost of production would perhaps end up even higher and in the event of cheap and substandard sugar from India the local sale of sugar would come to a halt, which will adversely affect the payments to growers," Kayani added. He said that he would urge the government to place Indian sugar on negative list at the forthcoming meeting of Sugar Advisory Board (SAB) to be presided over by the Minister for Industries and Production.