KARACHI, Aug 4: Sugar mills have urged the government to ban import of refined sugar.

They said that instead of refined sugar import, raw sugar may be imported to meet the expected shortfall of around 0.7 million tons in the next season.

The sources in the sector believe that there would be a shortfall in cane production next season and this would result in less white refined sugar production at 3.2 to 3.5 million tons.

Consequently, this would result in a shortfall of around 0.7 million tons which would have to be met through imports. However, millers say that duty-free import of refined sugar would push up prices because imported sugar is expected to cost of Rs34 to Rs35 per kg.

The Pakistan Sugar Mills Association (PSMA) has suggested to the government that in order to overcome sugar shortage during 2008-09 crushing season, import of raw sugar should be allowed.

Similarly, for sugar export to Afghanistan, the mill-owners’ body has suggested that raw sugar quota be allocated to mills for refining.

The export ban would only facilitate Indian sugar industry to dump their inferior quality sales tax free sugar in the domestic market en route to Afghanistan during transit, the PSMA vice chairman Iskander M Khan said.

He further said that the current increase in cost of doing business requires that the ex-factory price of sugar ranges between Rs31 and Rs32 per kg with the retail price of Rs33 to Rs34 per kg.

Mr Khan was critical of the previous government who allowed import of 2.2 million tons of sugar to overcome the deficit of 0.4 million tons.

He said this was the main cause of delay in payment to growers, drop in the value of sugarcane price and in extreme cases burning of cane crop by farmers.

He demanded of the provincial governments to fix cane prices as per contents of sucrose because this would help increase cane cultivation and production up to 25 to 30 per cent.

He warned that if the government fails to control the situation by taking pragmatic steps at the earliest, the ex-factory sugar price may go up to Rs36 per kg next season.

The PSMA figures disclose that up to July 15, total sugar production stood at 4.732 million tons. Out of this, 2.987 million tons have been sold and currently mills hold around 1.746 million tons while the Trading Corporation of Pakistan (TCP) has stocks of around 424,888 tons.

He asked the government instead of consuming TCP stocks during Ramadan, these should be kept as buffer stocks which would help minimise imports during next season.

Responding to a question, he said raw sugar price in the world market is far less than that of refined white sugar, therefore, the government should ban import of refined sugar.