KARACHI, March 31: A high-level meeting of the top bureaucrats of finance, food and agricultural ministries and the leaders of sugar millers, traders and importers is being held on Saturday at the president’s camp office in Rawalpindi to discuss the lingering sugar crisis that is showing no signs of respite.

Business sources believe that President General Pervez Musharraf is expected to have a direct and blunt talk with the sugar millers and traders and urge them to immediately find a way out for solving the problem.

“I am attending the meeting to represent the Pakistan Commodity Importers and Traders Association,” Raees Ashraf Tar Mohammad replied to a telephonic query, pointing out that there was much concern in the government about the rise in sugar prices.

After wheat and wheat flour, sugar is the most sensitive strategic item in Pakistan, as it is a vital ingredient of tea which is consumed as a food in many parts of the country.

Millers are said to have held back their product and released only 14 per cent of the production in the market, thus causing an unprecedented price hike. From Rs21 to Rs22 a kg, sugar prices went up to Rs45 and above in the retail market. Rough calculations show millers have pocketed Rs40 billion profits by hoarding and creating artificial shortage at a time when sugarcane crushing is at its peak.

The Saturday meeting is expected to draw up a strategy to ensure a steady supply of sugar and stabilization of prices in the retail market.

Meanwhile, business sources disclosed that traders had opened letters of credit for the import of about 400,000 tons of sugar since January this year. Out of this, more than 250,000 tons sugar have already arrived in Pakistan, while three ships, each carrying 15,000 tons, are expected to unload the commodity sometimes in the second week of April.

In addition, the Trading Corporation of Pakistan has made arrangements for the import of 150,000 tons of sugar which will be delivered in the next few weeks. “Importers will ensure a steady and regular supply of sugar in the market,” Mr Ashraf said.

India remains the main supplier of sugar because of its close proximity that gives a $30 per ton saving on freight. The overland transportation of sugar from India is cheaper but the existing logistics arrangement does not have much capacity. The other sources of sugar import are Thailand, China, Brazil and Gulf.

The business sources say that sugar prices in the international market soared to $477 a ton, a rise of $22 in the last 24 hours. The landed cost of sugar comes to Rs35 a kg and wholesale prices range between Rs37 and Rs38 a kg. It is sold for Rs40 a kg in the retail market.