Ministries uncertain on exact figure of sugar shortage

ISLAMABAD: There is no consensus within the government on the exact figure of sugar shortfall in the country during the current fiscal year, as different ministries have calculated different estimates for the shortfall of the commodity.

The Economic Coordination Committee of the Cabinet have been informed by the industry ministry that during current fiscal year 2008-09 there may be a gap of around 650,000 to 700,000 tonnes in the country. On the other hand, official sources in finance ministry are of the view that this gap is expected to be around one million tonnes.

According to the official sources, sugar production estimates for the current fiscal year have been projected at 3.5 million tonnes with opening stock as on October 1 at 1.1 million tonnes, which makes total availability at 4.6 million tonnes.

Country’s annual consumption is estimated at 4.5 million tonnes with end stock on September 30, 2009 at 0.10 million tonnes. The demand for October and November 2009 and annual demand of 5.25 million tonnes takes the final deficit at 0.65 million tonnes.

As per agriculture ministry estimates the sugarcane production during 2008-09 would be 51 million tonnes, out of which sugarcane for seed and Gur, which have been estimated at 20 percent of total production, would be 10.2 million tonnes and remaining 40.72 million tonnes of sugarcane would be consumed by the sugar mills.

As per world estimates, total sugar production is expected to be 161.6 million tonnes in 2008-09, down from 169 million tonnes last year, indicating shortfall of 5 percent. World’s consumption is estimated at 165.6 million tonnes. There are steady reports of lower sugar production in 2008-09 in several countries across the globe, especially India and European Union. In this scenario sugar, export surplus will probably be available with Brazil only.

The retail price of sugar in Pakistani market, which was recorded at Rs 31 per kg in July 2008 jumped to Rs 41 per kg in January 2009. According to the official sources, in the meeting of ECC held on January 27, the issue of sugar availability and prices was discussed in detail. It was decided that Ministry of Industries would hold meeting with Sugar Advisory Board to discuss the option regarding import of raw sugar or refined sugar so that a consensual proposal is submitted to ECC.

Strong opposition by Ministry of Agriculture and Kissan Board has led to the import of expensive refined sugar against earlier proposal of importing cheaper raw sugar for bridging the demand-supply gap 2008-09, official sources told daily Times.

Sugar advisory Board headed by Minister for industries, having membership from all key stakeholders, was of the view that at this stage import of raw sugar was not viable as it would take up to 40 days for import from Brazil to arrive. As per PSMA, the crushing season will end by February due to shortage of sugarcane. Therefore, option of importing refined sugar was found feasible. Agriculture ministry and Kissan Board also opposed the import of raw sugar, as it is likely to hurt the sugar cane growers.