ISLAMABAD, July 11: The government is expected to ban import of sugar - both raw and refined - in view of surplus stocks, declining prices trend and expected low sugarcane cultivation next season.

Official sources told Dawn that sugar situation was on the agenda of the Economic Coordination Committee (ECC) of the cabinet as the growers and the sugar industry had indicated looming sugar crisis.

Meanwhile, a government official said that the World Food Programme (WFP) has expressed its inability to purchase sugar for onward supply to Afghanistan, because Afghanistan, according to WFP, consumes more gur than refined sugar.

However, the government has not announced a formal decision with regard to ban since there was no import taking place at the moment but has given consent to the sugar industry that it will take appropriate measures to protect the local agriculture and industry.

Officially the ministry of commerce said: “(the) ministry will act, if there is any indication of import of raw or refined sugar.”

It also said that it was also “examining the need of increasing duty on raw and refined sugar.” The ministry is also watching the current situation very closely and is not interested in any import of raw or refined sugar with the aim to protect the farmers in the up-coming season.

The secretary general, Pakistan Sugar Mills Association (PSMA), K. Ali Qazilbash told Dawn that as on July 1, 2002, the country had surplus stock of 137,700 tons that would go up to 630,000 tons by the end of September this year.

He explained that even if 270,000 tons of buffer stock for October was also taken into account, total surplus by end of the season, i.e. November 1, 2002, would stand at 384,000 tons.

Qazilbash said that the industry had suggested to the government to arrange export of up to 200,000 tons of sugar immediately otherwise the local sugar prices would crash.

Already, he said, the prices have dropped from Rs2,222 per ton in March to Rs2,178 per ton and average prices ranged at Rs2,188, which was almost equal to the production cost.

The PSMA secretary general said that the sugar mills had already lost Rs12 billion due to surplus sugar import (both raw and refined) last year as total import stood at 1.15 million tons. This way, total surplus by end of the season was put at 620,000 tons.

Last year, total sugar production amounted to 3.2 million tons against this year production of 3.25 million tons. The local consumption is estimated at 3.52 million tons.

To a question, the PSMA representative said that export of the commodity to Afghanistan was only a couple of lots of 5,000 tons and 2,000 tons. Total sugar demand in Afghanistan, he said, was not more than 100,000 tons this year.