KARACHI, April 29: Sudden demand from the Indian distilleries surged molasses prices in the world market by over $20 per ton taking the produce to near all time high level at $50 to $55 per ton, exporters said on Thursday.
There are many inquiries from Indian distilleries for import of molasses from Pakistan and leading exporters are reported busy in preparing quotation cif Mumbai Port as well as fob basis.
First shipment of 6,300 tons of molasses is reported to have already left Karachi Port for Mumbai as the world trader have diverted the shipment to India to meet urgent demand from Indian distilleries.
As a result, molasses prices, which were hovering around $32 to $35 per ton early this month suddenly soared to $50 to $55 per ton on strong demand from Indian distilleries and processors.
There were strong indications that India would be facing sugar crisis next year. It seems their current cane crop also remained below the target resulting in molasses shortage. Exporters say that this season sugar production has also remained below the target but huge buffer stocks averted sugar crisis for now.
Nevertheless, it has turned out to be a boon for molasses exporters who would be getting better price for their huge quantity of exportable surplus of around 1.5 million tons. According to estimates the country this season has produced record sugar of around 4.1 million tons and as a result will have around 2.2 million tons of molasses.
A large number of Indian distilleries involved in producing rectified spirit, absolute alcohol, acetaldehyde, whisky have already started approaching local exporters for huge shipments of molasses.
An Indian distillery having achieved sales up to 35 million cases of IMFL (Indian Made Foreign Liquor) and rated as world's fourth largest spirit group - McDowell & Company Ltd - is also seeking molasses shipments from Pakistan.
A sugar unit, engaged in manufacturing value added products like rectified spirit, absolute alcohol, acetaldehyde has inquired about buying around 25,000 tons sugar cane molasses grade A (50 per cent TRS).
Trade circles believe that around 0.5 million tons would be needed by Indian distilleries to see the current season through. They also believe that there could be higher demand from India next year as the sugar crop is being forecast to be even lesser.
Exporters say that out of exportable surplus of 1.5 million tons export commitments to the tune of 0.7 million tons had already been made. It is further said that around 0.4 to 0.5 million tons have already reached Keamari storage tanks and there was no further capacity until and unless the shipments are made promptly.
Terminal operators have already approached Karachi Port for taking appropriate measures of clearing and providing prompt berthing to vessels coming at port for loading molasses. They pointed out that due to berthing problems congestion of molasses export vessels has occurred at Karachi Port and may cause huge demurrages to exporters.
In a letter to the deputy conservator of KPT the terminal operators further said that presently around four vessels are waiting offport for berthing and more are to follow as huge quantity of molasses was lying at Keamari storage tanks and there was no room for the storage of molasses which is on its way from different parts of the country.