ISLAMABAD, Aug 1: The government is unlikely to import sugar this year even after it removed import duties last week, as the country has enough stock to meet domestic needs, millers and importers said on Friday.

The government last week banned the export of sugar and removed a 25 per cent import duty ahead of the start of the holy month of Ramazan in September, as traders often stock up on food commodities ahead of this period.

But, with a total stock of nearly two million metric tons of sugar, traders dismissed concerns for any shortage before sugar from the new crop starts arriving in late November or early December.

“This is good enough to take care of domestic consumption up to December, including the demand in Ramazan,” said K. Ali Qazalbash, Secretary General of Pakistan Sugar Mills Association.

According to the association, as of July 15 the Trading Corporation of Pakistan had about 425,000 tons and mills had 1.84 million tons.

Traders also see no incentive in importing sugar whose landed cost will come to around Rs34 per kg at current international prices, making it costlier than average domestic prices of Rs32 per kg.

The government raised the import tariff to 25 per cent in November and also removed a 15 per cent export duty to encourage sugar exports after a bumper crop that produced 4.7 million tons in 2007-08.

The move enabled the government, which had been importing sugar in recent years, to strike its first export deals in five years in January, and the country had sold nearly 300,000 tons of sugar before the ban was imposed.

While sugar traders and millers see no shortage of the commodity, they expect output from this year’s crop to fall to 3.7-3.8 million tons.

The prospect of less-than-expected output has been raised

by a drop in the cultivated area, as many farmers have switched to rice because of rising prices for the grain both in domestic as well as international markets.

Farmers are also upset over non-payment by some sugar mills, and many cannot afford to buy adequate fertiliser because of the high prices so yields will suffer, while there are also water shortages in some areas.

“Sugar is sufficient for this year, but we are anticipating a gap next year, when we may need to import to meet the demand,” said Rana Ayub, a senior trader in Lahore.—Reuters