KARACHI, July 25: Huge unsold stock of white refined sugar are lying with the sugar mills, and until export outlets are found carryover stock could create liquidity problems for the crushers.

According to the latest production figures released by the Pakistan Sugar Mills Association (PSMA), the mills still held an unsold stock of 1.231 million tons, well above the local consumption before the next crushing season starting from late October or early November.

“Even after meeting entire domestic demand till the start of next season sugar mills will still have huge unsold stock of around 0.3 million tons,” PSMA chairman Ashraf Tabani told Dawn.

He said: “It would be in the larger interest of the sugar industry as well as the growers if the government allowed us to export the surplus to ease the liquidity crunch ahead of the new crushing season.”

On an average, he said, monthly sugar consumption in the country was at around 0.250 million tons, which would mean that before the start of next season on November 1, 2002, around 0.650 million tons would be further consumed from the existing unsold stock of 1.231 million tons. As a result there would be huge unsold or carryover stock of around 0.3 million tons with the mills.

The PSMA chairman further said that currently raw as well as white refined sugar prices in the world market had nosedived, but the government policy should be for the benefit of growers and the local industry.

Mr Tabani expressed his utter dismay over duty reduction on sugar import in the budget from 30 per cent to 25 per cent and said this had created uncertainty in the sugar industry.

He suggested that the government should immediately impose 30 per cent regulatory duty on import of sugar to protect the interest of growers. “Raw sugar imports should be totally stopped as it directly compete with our growers,” Ashraf Tabani added.

When the next season’s sugarcane crop is expected to be very good, therefore, he said, the PSMA’s demand to allow export was more relevant.

According to millers, the government in its recent meeting with the PSMA was willing to allow exports of 0.2 million tons to Afghanistan depending on response from the country, but the association wanted the deal on government-to-government basis.