LAHORE, Aug 9: Some commercial importers from Lahore and Multan have opened letters of credit (LCs) for import of around 6,000 to 12,000 tons of low quality sugar with high sulphur content from India, a sugar manufacturer told Dawn on Thursday.
The miller, who asked not to be named, said the sweetener is being delivered by Indian exporters at a very cheap rate of $282 per ton at Wagha border.
“It means that the imported product will cost importers only Rs25.50 per kg in Lahore’s market as against the current ex-mill rate of Rs28.25 a kg of domestic sugar,” he said.
He said there were credible reports from banks that commercial importers were preparing to open more LCs to bring in at least 50,000 tons sugar from India via Wagha.
The industry feels that the import of the commodity from India at this juncture would destroy market sentiments and result in a steep fall in the price of their product.
The industry claims that the mills had stocks of around 1.120 million tons which are sufficient to meet the domestic requirements till the end of November.
“In Punjab, we have stocks of 720,000 tons. In Sindh, the mills have 300,000 tons and in the NWFP there are stocks of 100,000 tons.
“The Punjab mills stocks also include 100,000 tons sugar already sold in future contracts, to be delivered from the end of August to the end of October. So the import of the product at this juncture makes no sense. It will not only jeopardise the interests of the domestic industry, but also the growers,” the miller said.
India has a sugar surplus of 13 million tons this year and seeks to export eight million tons at subsidised rates. The remaining five million tons will be used to make a buffer stock for future.
The industry claims that it is selling the product at a far lower rate than the price of Rs31 per kg agreed between the mills and the government before the commencement of last sugar harvest.
Prime Minister’s advisor on finance and economic affairs Dr Salman Shah has denied presence of any such agreement.
“Once Indian sugar lands in Pakistan, it will completely destroy our industry, which is already struggling hard to recover its production cost due to government’s policies,” the miller said.
The sugar industry says the import of Indian sugar with high sulphur content is also not in the interest of public health.
“If sugar has to be imported, it should only be for use in pharmaceutical industry, which the local mills do not produce,” the miller said.
The government has already assured the industry that it would not allow low quality product from India.
He said the government should immediately disallow import of sugar from India through an executive order or by sufficiently raising customs duty to protect the local industry and sugar-cane growers from unfair competition.