Sugar export not feasible as world rate lowers to $518/ton

December 24, 2012

Sugar Export
Sugar Export

LAHORE – The sugar export has not been feasible for the millers due to very late decision of the government as the international market rates have dragged down to the domestic level of $518 per ton, industry sources said.

Though the Sate Bank of Pakistan, following the decision of the Economic Coordination Committee (ECC) of the Cabinet, has allowed domestic mills to export 5 million tons of sugar without any quota restriction, yet it is too late decision to earn some margin when rates at global market are constantly dropping, they said.

The prices of white sweetener at international market will further down because the German government has announced subsidy on export of sugar to support its millers, which will also lead to decline in price of sugar further, they said.

Pakistan Sugar Mills Association Punjab chairman Riaz Qadeer Butt said that our exporters will take further time to export their stock as the government has lifted ban after a long time. As they are not used to aware of world market norms and clientage chain they will take more time to seek information for marketing of their product. He blamed the government for inconsistent policies, which confused the millers as well as the exporters to decide its production target and export strategies. He demanded the government to announce a complete and permanent mechanism for sugar export by fixing a limit. “Whenever the sugar production surpasses that particular limit, necessary for local needs, the sugar mill should export the surplus stock without waiting for permission of government. The long-term policies and permanent mechanism for sugar export will allow the millers to enhance their expertise and endeavour for foreign market, besides producing surplus sugar to earn precious foreign exchange,” Butt stated.
The present permission of export remains no more beneficial for industry and we cannot earn foreign exchange without subsidy of the government, he said. He added that every country provides subsidy to its sugar exporters with a view to attract foreign exchange. Our government should also provide rebate of up to Rs6 per kg on sugar so that millers could be able to export surplus stock.

It is to be noted that sugar millers advised the government to allow them to export of sugar right from the beginning of the crushing season to improve liquidity. They said that enhancement of liquidity would enable millers to make timely payments to growers. They said that sugar millers earned more than $200 million against the export of 300,000 tons of sugar during the past crushing season ended in April this year.

They said that after catering domestic demand of 4.5 million tons, they would be left with a surplus of 1.7 million tons.

Of the total five million tons of expected sugar production during 2012-13, Sindh will produce 1.5 million tons, Punjab 2.9 million tons and Khyber Pakhtunkhwa is expected to produce 600,000 tons of the commodity. Pakistan produced 4.8 million tons of sugar in the year (2011-12).

Sindh produced 1.3 million tons, Punjab 3.1 million tons while Khyber Pakhtunkwa produced 1.3 million tons.

The NATION

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