18 January 2004	Sunday	25 Ziqa'ad 1424

ISLAMABAD, Jan 17: The sugar industry on Saturday asked the government to either impose a 60 paisa per kg cess to help export sugar or purchase 0.3-0.4 million tons of the commodity to stabilize its prices , a senior official told Dawn.

Finance Minister Shaukat Aziz asked the industry to come up with a concrete proposal on the subject on Monday. The minister is unlikely to hold another meeting with the sugar industry because of his engagement in Karachi, followed by a meeting of the National Finance Commission (NFC) in the evening in Islamabad.

The official said a delegation of the Pakistan Sugar Mills Association (PSMA) led by its president Sikandar Khan met the finance minister here and briefed him about the looming crisis of surplus sugar.

The sources said the PSMA estimated total sugar production by end of the season at 3.9 million tons in addition to a carry over stock of 0.75 million tons. As such, the total surplus by end of the season in November is estimated at 0.8 million tons.

The PSMA is of the view that ex-mill sugar prices have already dropped to Rs14.50 per kg, lower than the actual production cost and retail rates have touched Rs18 kg. It believed that the country would be facing huge surplus problem if at least 0.3-0.4 million ton was not exported immediately which would create cash flow problems for the industry.

The PSMA has, therefore, demanded that either the government should purchase the commodity from the industry or else impose a 60 paisa per kg cess on sugar sale to meet export costs.

The PSMA sources said the industry was also facing problems in replacing the old stocks with new exportable stocks which the Trading Corporation of Pakistan (TCP) had purchased last year.

These sources said the TCP had purchased 0.1 million tons from the industry through open tenders and more than 60 per cent of this payment was still pending. The TCP would issue fresh tenders on January 22 to purchase another 0.1 million tons.

The sources said the TCP had withheld the payments to the sugar industry because the industry did not clear dues to the grower community. The industry sources, however, claimed that less than one per cent of the total payments to the growers were pending and that too because of a court dispute over premium prices in Sindh.