Government using delaying tactics in lifting sugar from mills: PSMA

In spite of showing consent to purchase 0.375 million tons sugar from the millers, the government, after a lapse of several weeks, is using delaying tactics to materialise the formal agreement, Pakistan Sugar Mills Association (PSMA) sources said. They said that according to tender signed in November 2011, the government machinery had to lift sugar from the industry against payments in seven days.
The millers want the government to buy sugar from them or allow them to export the surplus amount of the commodity. "We had offered to the government to buy sugar from mills at very low price of 46.25 per kg", said Deomal Essarani of Pakistan Sugar Mills Association (PSMA), adding that due to delaying tactics from government side in lifting the stock the industry is facing hardships in making payments to growers.
"If the government purchased 0.375 million tons of sugar, the industry would be able to pay around Rs 18 billion to sugarcane grower", he added. He said that at this point of time, when imported sugar costs Rs 60 per kg at port and in the market Rs 75 per kg, the decision to purchase from local sugar mills at Rs 46.25 per kg was the best deal for the government.
Sugar millers had asked the government to lift ban on export of sugar and allow export of 0.4 million tons of sugar. Some 0.8 million tonnes sugar is surplus in the country after meeting country's full next year requirement and with the decision of purchase of 0.375 million tons government still some 0.4 million tons of sugar is available for export, he added.
The industry is anticipating a bumper production of nearly 5 million tons of sweetener this season. Deomal said that allowing millers to export surplus sugar would enable the growers sowing of other crops on time and would help to redress and mitigate their plight as they are greatly devastated during the recent floods and rains. He said that export of sugar would help earn foreign exchange for the country, when sugar prices in the international market are well above the price in Pakistan. Sugar production in 2010-11 was 4.1 million tons. Sindh produced 1.3 million tons, Punjab produced 2.5 million tons while KPhad 0.250 million tons of sugar.