KARACHI, March 10: Pakistani importers have booked orders for the import of almost 500,000 tons of sugar since January, when the government allowed duty-free imports to cover supply shortages, an official said on Thursday.
Private importers had booked around 347,000 tons of raw sugar and 147,000 tons of refined sugar by March 8, a finance ministry official told Reuters.
“Our estimate is that some more LCs (letters of credit) will be opened for refined sugar import in the next few days,” said the official, who did not want to be identified.
“But the quantity should not be more then 10,000 to 20,000 tons as our hands are already full.”
The latest figures are on the higher side of the government’s estimates. Officials said in February that imports were not expected to exceed 400,000 tons.
Pakistan scrapped a 25-per cent import duty on sugar in January to cover an expected shortfall in production and check runaway domestic prices.
Domestic sugar production is expected to slip to 3.1-to-3.2 million tons in the current November to March season, compared with 4.0 million the previous year. Annual sugar consumption is around 3.6 million tons.
Domestic output dropped due to a water shortage which slashed the sugarcane crop to 47.3 million tons this year, compared with 52 million tons the previous year.
Millers also cite smuggling of gur (dry molasses of sugar cane) as another reason for domestic supply shortages.
“A large number of Afghan traders are buying gur from Pakistan because there is no tax on its sale,” said Zaka Ashraf, chairman of the Pakistan Sugar Mills Association.
Gur sales are tax free in Pakistan, while the government charges a 15pc sales tax on sugar.
Traders said importers have booked most of the refined sugar from the Dubai-based Al-Khaleej Sugar Mill for February/June shipment and a few shipments had already arrived.—Reuters
