LAHORE, May 18: The delay in the lifting of 200,000 tons of surplus sugar from the mills as promised by the government may result in delayed payments to growers, industry sources told Dawn on Tuesday.

Sources in the Pakistan Sugar Mills Association (PSMA) said it (the association) had already given a "written undertaking to the government to make complete payment to the growers by June 15 and commence crushing on Nov 1 provided the government lifted surplus sweetener in time."

The undertaking was given by the association in the light of a decision made by the ECC in its last meeting. "But the government has so far not issued tenders as promised by it which could delay payments to the growers," the sources said.

In April, the government had agreed with the millers to lift 300,000 ton surplus sugar to release pressure on prices. "Although Industries and Production Minister Liaquat Jatoi had agreed to lift 300,000 tons, the ECC reduced the quantity to just 200,000 tons and asked the PSMA to furnish the undertaking.

We've provided the undertaking as required but the government is yet to direct the TCP to lift the surplus sweetener," they said. "We are hoping that the ECC would instruct the TCP to lift the surplus sugar as promised in its meeting scheduled for Thursday," they added.

The government estimates that the industry will have a surplus stock of 500,000 tons on November 1, 2004, while the millers put the figure at 700,000 tons. The government had purchased 300,000 tons of surplus sugar till December, 2003.

Of this, 100,000 tons have been exported. "The government delayed decision on purchasing surplus sugar last year which resulted in delayed start of crushing and delayed sowing of wheat.

The results are obvious to everybody. Wheat production has been far less than expected. To avoid such a situation in future, the government should shun lethargy and take timely action," they said.

The millers say the procurement of surplus sugar would not only rid them of their stocks, pave the way for timely payment to the growers and facilitate commencement of next crushing on Nov 1 but also help the government meet the possible shortage next year as the cane growers are switching to cotton due to higher prices it had fetched last year.