ISLAMABAD, Aug 30: With a record 58 million tons of estimated sugarcane crop, the government has decided not to allow import of sugar this season, it is learnt.Informed sources told Dawn on Thursday that the government and the sugar industry had reached an understanding about the start of crushing season and ensuring sufficient buffer sugar stocks for carryover into the next season.

Dr Ashfaque Hassan Khan, Special Secretary, Ministry of Finance, said the government had decided to ensure about 400,000 tons of sugar stocks in reserve for market stabilisation. In addition, if sugar industry starts crushing on Nov 1 in Sindh and on 15 in Punjab and NWFP, there would be no need for sugar import.

However, the government will hold consultations with the industry and examine stock position and the crushing situation to ensure these objectives. If a gap was found between demand and supply, the government would allow sugar imports to meet the deficit, he told Dawn.

A meeting of the sugar industry and a secretaries’ committee - that was convened on Thursday to finalise minute details of the agreement and formally announce the decision - was postponed until Sept 11 because of engagements of Dr Salman Shah, adviser to the prime minister on finance.

Secretary General, Pakistan Sugar Mills Association, K. Ali Qazilbash, said the government and the industry had already agreed on the basic objectives.

He said the millers had already decided to start crushing in the first week of November in Sindh and second/third week of November in Punjab and NWFP, respectively, and hence they would have no problem to accept official demands.

He said the country’s current sugar stocks of 1,175,000 tons were sufficient for until end of November because monthly consumption ranged between 350,000-375,000 tons.

With the start of crushing in early part of November, the new production would also be available in November that would reach about two million tons by March.

Mr Qazilbash said a record production of 4.2 million tons of sugar was expected next season because of a historic 58 million tons of estimated sugarcane crop.

Pakistan produced about 55 million tons of sugarcane in 1998-99 that too was a record. Last year, the country had a 50.6 million tons of sugarcane crop.

Under a long-term understanding between the PSMA and a committee on core inflation, led by Minister for Industries Jahangir Khan Tarin, the sugar mills would start crushing on Oct 15 in Sindh and Nov 1 in Punjab and NWFP from next year but provincial governments would be flexible in start of crushing in case of later maturity due to weather.

The federal and provincial governments would formulate sugarcane/sugar policy in consultation with stakeholders by Sept 15 every year.

The policy will envisage that sugar should not be imported until the size of sugar season is determined by the end of March except in case of very abnormally high sugar prices.

The government would build up a buffer stock of 400,000 tons for price intervention through import or local purchases in staggered intervals during December to April.

The Trading Corporation of Pakistan should buy sugar through open tenders.

In has also been decided that millers would pay the cost of storage and replace it with new stocks every year in case buffer stock remains unsold and is purchased from them.

The committee suggested that sugarcane support prices should not be raised from existing levels in 2007-08.