Sugar mills seek permission for export

PSMA ex-chief says export to stabilise sugarcane prices.

ISLAMABAD: Sugar manufacturers have sought permission of the government for export of 500,000 tons of the surplus commodity in order “to stabilise the market”.

“If the government does not purchase sugar at Rs65 per kg, the industry should be allowed to export the commodity that will stabilise sugarcane prices,” Iskander Khan, former chairman of Pakistan Sugar Mills Association (PSMA), said while talking to The Express Tribune.

“The country’s demand of sugar is 4.3 to 4.4 million tons and it would have a surplus in the current season,” he said, adding export of surplus sugar should be allowed to save the industry as well as farmers.

Last year, the sugarcane rate stood high, translating into sugar price at Rs65 per kg, he said. However, sugar price has dropped now which industry sources attribute to a delay in opening a purchase tender by the Trading Corporation of Pakistan (TCP).

TCP had issued a gallop tender for purchase of 200,000 tons on November 4 and in response 27 sugar mills submitted bids, offering rates of Rs65-66 per kg. However, the Economic Coordination Committee (ECC), when told that sugar was being sold for Rs53 per kg in the retail market, constituted a committee to negotiate a lower price with the millers.

“If the government procures 0.2 million tons at Rs53 per kg against the price of Rs65, the sugar industry will suffer a massive loss of Rs2.4 billion that will ultimately hit poor farmers,” Khan said, adding mills would not be able to pay farmers even the support price.

Published in The Express Tribune, December 14^th, 2011.