KARACHI, Feb 3: Pakistan is planning to import sugar from India via a land border crossing in an effort to cut transportation time and tackle domestic shortages quickly, a senior government official said on Friday.

“We have decided in principle to open up the Wagah border for sugar trade,” said Ashfaque Hasan Khan, an adviser to the finance ministry, referring to a crossing near Lahore. “The plan is in an advanced stage of implementation,” he told Reuters.

Sugar used to come in through Wagah before imports from India were banned in 2001 after complaints that cheap Indian sugar was hurting Pakistani cane growers and processors.

Pakistan lifted the ban last year but did not allow the sugar to come in overland. As a result, Indian traders have recently sold around 4,700 tons of sugar to Pakistan but hardly any had been delivered, traders in Pakistan said.

Pakistan and India import commodities from as far away as South America despite having surpluses to meet each other’s needs.

Mr Khan said high global sugar prices had forced the government to look for “the closest and cheapest source of imports”.

The government has asked the Pakistan Railways to allocate wagons for carrying sugar from India, and Mr Khan said the Trading Corporation of Pakistan (TCP) would play a major role in the current year after private companies failed to import enough sugar to avoid a supply crunch.

“The TCP will import refined sugar throughout the year as the private sector has failed to deliver,” he said.

“Last year the private sector signed contracts for over 1.2 million tons, but the actual deliveries were less than half a million tons.”

The TCP says it plans to import 50,000 tons of white sugar from India, for which a tender will be issued soon.

Pakistan will need to import 800,000 tons of sugar by the middle of 2006 to meet domestic needs and avoid price spikes.

The country’s sugar production is expected to decline to between 2.8m and 3m tons in the production year that began in November from 3.2m tons the previous year. Pakistan’s annual sugar consumption is 3.8 million tons.

Production dropped after sugar cane output declined to 45 million tons from 47m tons last production year due to low rainfall and the conversion of sugar-growing land to cotton.—Reuters