Sugar crisis round the corner, 45 days’ stock left

LAHORE: The sugar crisis is round the corner amid an already aggravating wheat crisis, as the mills and TCP have stock of only two and half months left, the industry sources told Daily Times on Wednesday.

The sugar industry stakeholders said that currently the sugar mills have a stock of 650,000 tonnes while TCP has less than 300,000 tonnes of sugar. Currently, Pakistan consumes 4.3 million tonnes of sugar in one year.

The prices of sugar in international market have also surged dramatically due to less production. The sources said that the sugar crisis would be severe than the crisis of 2004-05 sugar crisis, in which the sugar became a precious item and Pakistan has to import. However, this time the situation would be harsher, as the international stocks have also declined sharply due to less production in Brazil and India.

Sugar output in Brazil’s centre south, the world’s biggest-producing region, slumped 20 percent in the first half of August after rains slowed harvesting and mills turned more cane into ethanol.

According to center for south Sugar and Ethanol Industry Association, output in the region, where mills produce more than four- fifths of Brazil’s sugar, fell to 1.71 million tonnes through August 15 from 2.15 million tonnes a year earlier. International Sugar Organisation (ISO) has forecast the global production to fall 7.4 million tonnes to 161.6 million tonnes in 2008-09. The less production has caused increase in sugar prices at International level. Currently the landing cost of sugar at Karachi is Rs 40 to Rs 42 per kg while it was less than Rs 35 a couple of months ago. It was the case with refined sugar, which was available for Rs 29 to Rs 30 per kg, is now hovering at Rs 36.

Another factor for increase in price would be less sugarcane production, as the farmers were completely ditched during the previous governments era. They were even denied mutually agreed price and still a number of mills have declined the payments to the farmers. The repeated orders of the government went in vain and the millers still own around Rs 500 million to the farmers.

Vice Chairman Pakistan Sugar Mills Association (PSMA), Iskandar M Khan said that the sugar stocks in the coming months would be very less and crisis would deepen. He said that the government should look into the matter and must take serious steps. “The sugarcane support price has not been announced and further delay would wreak havoc for the country,” said Khan. He demanded that the government should also make efforts to help the farmers and suggested that the price of sugarcane should be linked with sucrose content instead of weight. If the sugarcane price is linked with the sucrose level then a number of complaints of millers and farmers could be overcome.

source:dailytimes