LAHORE, Nov 30: Commerce Minister Abdul Razak Dawood said on Friday the government had decided to increase import duty on sugar to 30 per cent from the existing 20 per cent.

“We have also spoken to the central bank governor to help resolve the liquidity crisis faced by some sugar mills. The steps had been taken to pull the industry out of crisis, the minister said in a press conference here.

The Commerce Minister admitted that the current sugar crisis was “partly the result of excessive import of the commodity from India last year because of incorrect estimates about local production”.

The minister, speaking at a hurriedly called briefing on sugar crisis, sought to diminish the blame. “There are several factors responsible for the present crisis. One was a higher degree of import from India. We banned import of sugar in March whereas we should have done so in January. The ban was delayed because we were told (by the Ministry of Food, Agriculture and Livestock) that local production would be close to 2.1 million tons. But the mills produced 2.4 million tons at the end of the crushing season that created a glut in the market,” he said.

He admitted that the mills had all along been telling the government that they would produce 2.4 million tons. He, however, added the mills had told him that their carryover stocks from the last season would be 150,000 tons on Dec 1, enough for two weeks, that was not much for a nation of 140 million people.

He said the idea of exporting sugar without a subsidy had also been dropped since the mills from Sindh had not agreed to it.

Dawood said the sugar industry could be made “competitive and efficient provided all stakeholders — the growers, the mills and the government — agreed to work hard over the next five years”.