ISLAMABAD, Nov 4: Prime Minister Mir Zafarullah Khan Jamali has directed the Trading Corporation of Pakistan (TCP) to purchase 200,000 tons of sugar from the mills through tenders for buffer stock.

Industries and Production Minister Liaquat Ali Jatoi told a news conference here on Tuesday that 100,000 tons would be procured immediately from those mills that cleared payments to the growers and started sugarcane crushing not later than November 15.

A decision to this effect, he said, was taken at a meeting presided over by the prime minister on Monday night. The meeting was also attended by ministers for commerce, food and agriculture and industries and production.

He admitted that the TCP had lost Rs700 million when it procured 100,000 tons of sugar for export at the start of the season and added the government had decided to absorb further losses in the procurement of the remaining 200,000 tons to ensure payments to sugarcane growers and to enable the mills to start crushing.

He said the remaining 100,000 tons of sugar would be procured from the mills in late December or early January and then assess future availability situation. If the next season’s production is satisfactory, the government would then ask the TCP to export the buffer stock.

He said the government feared that growers could switch over to cotton in view of sugar crisis. In addition, cotton is fetching good prices this year.

Mr Jatoi said the provincial governments had been asked to ensure implementation of the prime minister’s decision through respective cane commissioners. He expressed the hope that the Pakistan Sugar Mills Association (PSMA) would also honour its commitment to start crushing by November 15 after the government had honoured its part of the bargain by purchasing 300,000 tons of sugar at a big loss.

He said the prime minister’s decision was based on recommendations of a four-member committee comprising ministers for finance, commerce, industries and food that also held separate meetings with growers and the PSMA.

He said in reaching this decision it was also kept in mind that if timely crushing was not started, it would cause damage to wheat sowing and the country could ill-afford to import this vital commodity.

Mr Jatoi said the surplus sugar crisis was created because no timely decision could be taken last year because of post- election obligations like government formation, etc.

The minister disagreed with the suggestion that the sugar sector could be left to the market

forces because as he said the producers would immediately export their produce and the government would have to import the commodity later in the year at higher rates.

He brushed aside a notion that surplus sugar stocks would be in the region of one million tons by December and said the crop in Thatta and Badin was badly damaged this year and it was difficult at this stage to estimate total production. But even if there was sufficient surplus, a decision to export further sugar would be taken at a later stage, the minister said.