KARACHI, May 1: The country is expected to have a sizeable exportable surplus of white refined sugar during the current crushing season and millers suggest that a small percentage should be reserved for export to Afghanistan.
“We are going to have a production surplus of over 0.7 million tons and after having a buffer stock of 0.2 million tons an exportable surplus of 0.5 million tons would be available,” mill owners said.
The sugar industry had been demanding of the government to allow export of up to 0.2 million tons to ease the liquidity position of the mills which are presently holding unsold stocks of up to 1.883 million tons.
The industry also entered into negotiations with the Ministry of Commerce seeking permission for the TCP to purchase around 0.2 million tons of white refined sugar from the mills. But so far no tangible results could be achieved.
However, the Minister for Commerce Abdul Razak Dawood has recently indicated to approve such a plan at the fag end of the current season or on the beginning of new crushing season in November this year.
“Presently the industry is faced with acute liquidity problem as a huge amount of around Rs30 billion is blocked in sugar inventory, which is higher by 0.384 million tons over the last year,” the chairman Pakistan Sugar Mills Association (PSMA) Ashraf W Tabani told Dawn.
He said the situation would not have been so bad had the government last season not allowed unbridled imports of white refined sugar, which resulted in huge carry-over stocks of over 0.6 million tons with the mills.
With the present crushing season almost over, Tabani said, the white sugar production is expected to be around 3.2 million tons, and adding 0.6 million tons to it would mean total available sugar for current season would be around 3.8 million tons.
After meeting domestic demand of around 3 to 3.1 million tons, around 0.7 million tons of white refined sugar would be surplus, he added.
According to PSMA figures, sugar production up to April 15, 2002, stood at 3.126 million tons and after disposing of 1.242 million tons, the industry was still holding around 1.883 million tons of unsold stocks.
These figures further show that sugar production in Punjab had been remarkably higher at 2.060 million tons over the last season’s corresponding period when production stood at 1.438 million tons. Though most of sugar mills have closed down by middle of April, but a few mills which were still operating in upper Punjab were expected to close their current crushing season by end of last month.
However, white sugar production in Sindh, where current crushing season has closed down since late March 2002, stood at 0.947 million tons compared to 0.971 million tons last year. Similarly, in NWFP where current crushing season is also over, the production stood better at 103,661 tons as against 60,582 tons recorded last season.
The Sindh sugar mills could not get better production as most of the cane crop was based on a third year ratoons (root) which resulted in lesser sucrose. Since there was shortage of cane in the province the mills have to purchase the produce at a higher price. The average sugarcane price stood between Rs55 to Rs60 per maund instead of government indicative price of Rs42 per maund.
On the other hand in Punjab the cane price remained close to indicative price of Rs42 as it remained buyers market. It is expected that since Sindh growers got better price next year there would be better cane crop.