July 10, 2003	Thursday	Jumadi-ul-Awwal 9,1424

ISLAMABAD, July 9: Second phase of sugar export programme was likely to begin in August with 100,000 tons to be offered for sale over the next three months, a government official said on Wednesday.

A senior official at the Ministry of Production and Industries, which handles sugar trade, said the government would export sugar through Trading Corporation of Pakistan rather than private traders as originally planned.

“The (ECC) Economic Coordination Committee has recommended the federal cabinet to allow exports through TCP as exports through the private traders are currently not feasible,” the official, who asked not to be named, added.

The cabinet will approve the decision at its next meeting.

Pakistan decided in December to export at least 300,000 tons of refined sugar in 2003 to reduce surplus stocks. The decision followed demand from the industry, which has blamed surplus stocks for low domestic prices.

TCP had already exported 100,000 tons of refined sugar and waiting for the go-ahead from the government to export another 100,000 tons.

“We can export 100,000 tons by September as Indonesia is in the market with some big orders,” a TCP official said.

Refined sugar output in Pakistan hit a record high of 3.58 million tons in the last production year of 2002/03 (November-April), and that, according to industry officials, has depressed prices in the local market.

The country, which has an annual sugar demand of 3.324 million tons, produced around 3.25m tons of sugar during the 2001/02 crushing season, up from 2.7-2.8m tons the year before.

Industry officials said the country has total stocks of 4.23 million tons, including production in 2002/03 plus the carryover stocks of 637,000 tons from the 2001/02 season.

They said that a net surplus of 938,000 tons of sugar would be available in the country before the start of the next crushing season in November.

A sugar mill owner in central Punjab province said growing surplus stocks from last year have depressed already rock-bottom prices in the local market.

“The country has almost a million tonnes of surplus stocks. We need to export at least 300,000 tons from the surplus stocks to support falling prices,” he added.

But the government officials said high cane prices and production costs had made Pakistan sugar uncompetitive on the world market.

The industry has attempted to export sugar in the past but largely failed because of high costs.

The traders said the local sugar mills were selling at below production costs on the local market at Rs18 to 18.25 per kg at mill gate and Rs22 to 23 per kg in the shops.—Reuters