KARACHI, Oct 29: The country is to face a shortfall of around 0.4 million tons of sugar during the next season (2008-09) because there will be around 20 to 30 per cent less production over previous year’s record output of 4.75 million tons.

Industry sources said that there may be short sugarcane crop owing to shortage of irrigation water and shifting to other crops by growers after getting lesser price for cane.

The sources said that the estimated production of white refined sugar during the new crushing season is being placed at around 3.5 million.

Based on the monthly consumption of around 350,000 tons per month of the white refined sugar, the country’s annual requirement presently stands at 4.2 million tons.

According to official figures, sugar stocks as on Sept 30 stood at 1.114 million tons. Of these, 627,048 tons are held by the industry, 404,516 tons by the Trading Corporation of Pakistan (TCP) and 82,930 tons are carryover stocks from previous year.However, stocks held by the industry are going to be consumed during October and November while the TCP stocks would be for consumption in the new season.

Consequently, the expected production of around 3.5 million tons during the new crushing season, and the TCP stocks would result in the availability of around 3.9 million tons of sugar for 2008-09.

However, industry sources said that sugar prices are falling in the world market for the last six weeks which should immediately be availed by the government by allowing raw sugar import at the earliest.

Pakistan Sugar Mills Association (PSMA) former chairman Mohammed Kasim Hasham told Dawn that sugar prices in the world market dropped since last six weeks by $100 per ton and the difference between raw and white refined sugar was previously negligible, but now it has widened quite significantly up to $70 per ton.

He further stated that white sugar is being presently quoted at $297 per ton FOB in the world market and raw sugar was costing $235 per ton FOB. Therefore, there was an urgent need to make a quick decision for allowing import of around 0.5 million tons of raw sugar.

The country could save millions of dollars if policy-makers take a bold step of allowing raw sugar import during the crushing season, because it will cut processing cost of the industry.

Responding to a question, Mr Hasham said that when the country is faced with a shortage of sugar, it would have to import sugar to meet the domestic requirement.

Therefore, timely decision would help save valuable foreign exchange at a time when the country is faced with depleted forex reserves.

He said there was also a need to build buffer stocks for the next crushing season, and if possible higher quantity of raw sugar be imported so that around 0.5 million tons of white refined sugar be available as opening stocks for 2009-2010 crushing season.