KARACHI, June 13: Sugar scene in Pakistan is becoming murkier with about two dozen importers are desperate to dispose of their about 200,000 tons stock on discount to the government because of what they say sugar prices are crushing and they seek a bailout.

Raees Ashraf Tarmohammad, Chairman of the All Pakistan Grocers and Importers Association, who in the last one year or so has emerged as a major player of commodity imports, wants the government to ask the Trading Corporation of Pakistan to lift about 200,000 tons of sugar instead of importing it.

Sugar prices have crashed because the domestic inventory is expected to go up to 2.3 million tons in next six months as against local demand of 1.9 million tons. Sindh and Punjab millers have with them 1.1 million tons, while private traders hold about 550,000-600,000 tons stock. The TCP has so far imported about 150,000 tons of sugar and is set to place orders for about 600,000 to 700,000 tons.

With an unsold stock of more than half a million tons, about two dozen importers, with Raees Ashraf Tarmohammad as their leader, have urged the government to lift their 200,000 tons stock at a rate of about $440 a ton. “We will suffer a loss of Rs2.35 per kg and the total comes to over Rs400 million,” Mr Tarmohammad said. “We want to be bailed out of the burden that we carry now at no cost to the government.”

Importers are not happy with the decision of the State Bank to impose a 50 per cent cash margin condition on sugar loans. The SBP has also advised the sugar importers to clear all their outstanding loans by July 31. The importers want some relaxation or else as Mr Tarmohammad foresees “many importers will end up defaulters”.

Sugar importers talked to Prime Minister Shaukat Aziz on Tuesday and sought his help, who according to Mr Tarmohammad, had promised to help them. They also talked to prime minister’s adviser on finance Dr Salman Shah in Karachi on Tuesday, who has also promised to bail them out of this distress situation.

According to Mr Tarmohammad, sugar import in January was only 1,185 tons, which went up to 21,128 tons in February. It jumped to 83,379 tons in March and increased more than double to 174,263 tons in April and 185,000 tons in May. Sugar trickled down from other sources. As stocks accumulated sugar now tastes bitter to the importers.