LAHORE, Sept 26: In view of likely shortage of sugar during the next crushing season (Nov-March), some sugar millers suggest that the government should make it mandatory for the industry to process one million tons of raw sugar according to the capacity of each mill to cover the production shortfall.

“The government should take this decision now if it wants the consumers to get the sweetener at affordable prices,” former provincial chairman of the Pakistan Sugar Mills Association (PSMA-Punjab) Javed Kayani said while talking to Dawn on Monday.

Like the previous season, the country’s sugar output is estimated not to exceed three million tons in view of the smaller crop size. This means a gap of around 840,000 tons in supply and demand. “If a timely action is not taken, the sweetener’s prices will once again shoot up just like this year as a result of short production,” said Mr Kayani.

The wholesale sugar prices rose to Rs27 per kg in February and to Rs28.50 in July this year from Rs20 in October last year. In order to hold down the consumer prices, the government permitted duty-free import of refined and raw sugar in February. It also lifted a four-year old ban on its import from India. Moreover, the government also inducted the Trading Corporation of Pakistan (TCP) in the market, telling it to offload its 314,000 tons stocks in the market and import another 200,000 tons of refined sugar before the advent of Ramazan early next month.

While these measures helped bring down the wholesale sugar prices to Rs25 per kg, it is being feared that the market will once again heat up early next year if additional quantities of the sweetener are not imported well before the end of the next crushing campaign.

One sugar miller, who endorsed the proposal to import raw sugar and allocate quotas to each mill according to its crushing capacity, said the “step would save foreign exchange needed for importing refined sugar and allow the mills to operate at their full production capacity”.

Mr Kayani said the country had imported about 200,000 tons raw sugar early this year after the government allowed duty-free import. “However, its arrival was delayed till April that prevented the mills from refining the entire import,” he said.

The mills, according to him, could refine only 157,000 tons before shutting down their operations.