ISLAMABAD, April 4: Pakistan will have to bear an additional financial burden of about $200 million because of a delay in sugar import to meet its annual consumption of four million tons. This additional cost will accrue from the import of about one million tons of sugar to meet the shortage, as total annual production from the local industry and import will stand at around 2.9 million.

Sources told Dawn that the country could have benefited from sugar import in October last year when the average price of the commodity was less than $300 per ton in international market, but now the price had risen to over $500 per ton.

On the other hand, the private sector was not happy with the government decision to make the deemed price same for both importers and local producers of sugar for the levy of general sales tax (GST). With the fixing of value for GST, the wholesale price of local sugar in Karachi stood at Rs36 per kg, while the wholesale rate of imported sugar in Karachi will be around Rs35.5 per kg.

Although the deemed price of sugar will result in reducing the incident of tax on sugar, the importers may not be happy with the decision and import sugar at a cheaper price from any country. The CBR fixed $440 per ton as deemed price for GST on import of sugar.

Official statistics compiled up to March 28 revealed that total production of sugar from 29 million tons cane procured this year stood at 2.53m tons. The sugar procured from raw sugar imported during the period November 2005 till February 2006 stood at 323,917 tons.

The total quantity of refined sugar imported during this period stood at 160,000 tons, while the TCP held a stock of 80,000 tons. At the time of last crushing, 100,000 tons surplus stocks were lying with sugar mills and 300,000 metric tons with the Trading Corporation of Pakistan.

The statistics showed that this brought the total sugar produced to 2.9 million tons this year as against the total consumption demand of four million tons. Monthly consumption stands at 330,000 tons.

“If we incorporate six months usage from October 1, 2005 to April 1, 2006, the total consumption stood at two million tons approximately,” officials said.

According to the statistics, total stocks in sugar mills stood at 1.7 million tons which would last for only three to four months.