Pakistan can pay IMF 2 tranches by exporting 1m tons sugar

LAHORE - Pakistan can repay two installments of IMF loan worth about $0.5 billion by exporting just 1 million tons of sugar, as after consumption, 1.7 million tons of white sweetener will be surplus during the season while the TCP is directed by the Cabinet to maintain strategic stock of 0.5 million tons.

The sugar industry representatives have asked the government to allow export of 1 million tons of sugar as crushing season has commenced, which will produce further 5 million tons of sugar, while the country has already carryover stock of over 1.2 million tons, totaling 6.2 million tons availability of commodity during the season.

“As the consumption across the country is not more than 4.5 million tons, we will have leftover stock of 1.7 million tons of sweetener, implying that industry can export at least 1 million tons of sugar easily during the season,” they said.

They said that by exporting 1 million tons of white refined sugar from this season’s production, Pakistan can fetch about $0.5 billion foreign exchange, which is equal to the amount of about two installments of the IMF loan.

“If the government does not allow sugar exports the sugar stocks would pile up and the industry would not be able to purchase cane from the growers,” Chairman of Pakistan Sugar Mills Association Punjab zone Riaz Qadeer Butt said.

He anticipates a bumper sugar crop for the season 2012-13, putting the stockpiles of sweetener at 6.2 million tons after adding carryover stocks of 1.2 million tons. “The country’s total available refined sugar stocks would be 6.2 million tons at the end of ongoing crushing season,” he said. The Economic Co-ordination Committee (ECC) of the Cabinet had decided to allow millers to export 400,000 tons of sugar without imposing any restriction on mills regarding export quota.

The export of 200,000 tons and 135,834 tons of sugar has already been approved by the ECC and with the approval of export of another 64,166 million tons, the total of 400,000 tons will be exported. “Under the ECC decision no quota restrictions have been imposed on mills. Millers can export the commodity with their available stocks lying at godowns.

Millers appreciating the government move demanded further allocation of export quota in order to ease financial issues so that the sugarcane growers are paid in time at the rate fixed by the government. They said that there would no shortage of sugar in the country if the government allows millers to export 1 million tons sugar, adding that a huge surplus sugar is available in the country and bumper crop of sugarcane is also expected this year. They said the government should devise proper export policy in order to facilitate the industry and the growers.

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 Pakhtunkhawa produced 1.3 million tons. PSMA Punjab chairman said exporting sugar would help not only off-loading the surplus sugar but also help earn precious foreign exchange for the country at a time, when the sugar prices in the international market are well above the prices in Pakistan.

source: nation