Sugar price may further
05, 2012: Price of sugar is likely to show further increase
on account of fear of lower production in the country as
compared with earlier estimates and putting Indian sugar on
the negative list with the approval of the federal cabinet,
well informed sources in Ministry of Industries told our
"We are also considering slapping a ban on sugar export
keeping in view the present and future scenarios," the
The price of sugar has witnessed an increase of Rs 7-8 per
kg in the retail market within weeks after reports suggested
that local production is not matching estimates at the start
of crushing season and ascertained by the government at
Javed Kayani, Chairman of Pakistan Sugar Mills Association,
a representative body of sugar mill owners, has advised the
government to remain vigilant about sugar situation and
review its earlier decision regarding export in order to
avert any chaos in the country.
On January 20, 2012, Ministry of Industries(MoI) had
informed the Economic Co-ordination Committee(ECC) of the
Cabinet that due to likely bumper sugarcane crop, sugar
production would be 4.8 to 5 million tons while average
annual consumption during the last three years was 3.8
Thus a surplus of about 1.3 to 1.7 million tons was
In January 2012, Economic Co-ordination Committee (ECC) of
the cabinet allowed export of 0.1 million tons of sugar
(5000 tons each) on E form, but this has not materialised so
"Due to prolonged winter and heavy frost, yield of sugarcane
in various areas of the country is reported to be on the
Keeping in view this situation, we suggest that the export
of sugar should only be allowed after the final production
figures are in hand and the crushing season is over," the
sources quoted Chairman PSMA Javed Kayani as stating.
The PSMA with the objective of avoiding any untoward
situation has advocated building of further strategic
reserves through Trading Corporation of Pakistan.
Kayani argues that as the GoP has recently entered into an
agreement with Iran for barter trade, and intends to export
1 million tons of wheat and 200,000 tons of sugar against
import of urea, there is a need for TCP reserves to take
precedence over exports at this juncture.
Moreover, the crushing season is still in progress and
supply of sugarcane has come to an abrupt end due to low
yields in the fields..
Therefore, it is imperative to look at the actual production
figures before any sugar can be considered for export.
However, the chairman PSMA said that they were hopeful that
there would be no shortage of the commodity.
Meanwhile, the Punjab government through its chief secretary
also wrote a letter to the federal government to allow
export only after the crushing season was over.
The PSMA, sources said, had also proposed to the government
that Trading Corporation of Pakistan (TCP) should be
instructed to procure another 0.1 million tons of sugar from
mills to build the country's strategic reserves, adding that
first priority should be given to the domestic requirements.
Presently, sugar millers are buying sugarcane at Rs 205 per
40 kg, Rs 55 higher than the notified price of Rs 150 per 40
According to the National Sugar Policy 2009, the government
is required to maintain strategic reserves of 0.5 million
tons to ensure sugar availability and price stability and
make monthly USC interventions and the month of Ramazan.
Industries Ministry had suggested to the government that
there was a need to keep 1.1 million tons of sugar in
reserve against which TCP had old stocks of around 0.1
Some of the ECC members opined in the ECC meeting on January
20, 2012 that allowing sugar export at this juncture was not
feasible since as per cropping patterns 2013 was expected to
be lean year and Pakistan might end up importing sugar.
TCP has already procured 78,000 tons of sugar from mills on
the directives of the ECC but is not reportedly willing to
On the same day, the PSMA expressed it concern through a
letter to the federal government for restrictions on export,
Senator Islam-ud-Din Shaikh requested the Commerce Ministry
put refined sugar on negative list to protect local sugar
industry and growers who were not getting due return on
Senator Shaikh, who is a sugarcane grower and mill owner
from Sindh, informed a Senate's panel that sugar mills had
produced one million tons of sugar surplus, requesting the
government to allow export of 0.5 million tons.
Senator Haroon Akhtar Khan, who was also present in the
meeting, expressed his concern over zero duty on imported
sugar and argued that the move would destroy the local
The committee headed by Senator Ilyas Bilour, in a unanimous
resolution requested the Commerce Ministry to allow export
of 0.5 million tons of sugar keeping in view the interests
of sugar industry as well as growers.
Chairman PSMA Javed Kayani has already written a letter to
the GoP to keep sugar on the negative list as dumping of
sugar from India would only annihilate the growers and sugar
industry in Pakistan.
Courtesy: Business Recorder