KARACHI, Jan 14: A larger sugarcane crop in 2002 is expected to boost sugar output in the current 2002-03 marketing year and leave a big surplus for export, agriculture and industry officials said on Tuesday.

But an industry proposal for tax incentives or a development fund that can subsidize exports has not made progress, without which Pakistani sugar will remain expensive in the international market.

An agriculture ministry official in Islamabad told Dow Jones Newswires sugarcane production was estimated at 51.6 million tons in 2002, up from 48 million tons in the previous year.

“We do expect that sugar output may exceed last (marketing) year’s figure,” the official said. Pakistan’s sugarcane crushing season began in October and will end in March.

The industry estimates for sugar output for this marketing year at 3.6 million tons, up from 3.2 million tons in the previous year. This year’s crushing season started with a carryover stock of 400,000 tons. Domestic demand is 3.3 million tons.

The local sugar industry lobbied in 2002 for government incentives to export 200,000 tons, but no progress was made. An industry proposal to allow tax relief or a rebate of 0.25 rupees per kg for export purposes is still being discussed.

An industry official said sugar surplus could reach 500,000 tons in 2003, but he added that without incentives, exports were unlikely.

Commerce ministry officials and traders estimated the surplus will be lower, in view of informal trade with landlocked Afghanistan. — Dow Jones Newswires