Pakistan delays importing raw sugar - officials

ISLAMABAD, Oct 30 (Reuters) - Pakistan has delayed a decision until December on the import of raw sugar that millers had proposed to meet an expected shortfall next year, government and industry officials said on Thursday.

Pakistan's sugar output in the 2008/09 financial year is expected to fall to between 3.5 million and 3.6 million tonnes, down from 4.7 million tonnes the previous year.

Millers had asked the government to import up to 400,000 tonnes of raw sugar, with at least half of that in November when the crushing of the new crops starts.

At a government meeting this week, the Industry Ministry was asked to review the country's stock position to determine how much sugar was needed before a decision was taken in December to import raw sugar, said an Industry Ministry official who declined to be identified.

The official did not say why the decision had been delayed till December, but the government has been discouraging imports as the country faces a severe balance of payment crisis and is in talks with bilateral and multilateral donors for immediate assistance.

In July, Pakistan removed import duties on refined sugar ahead of the Muslim Fasting month of Ramadan to preempt shortages, even though millers had opposed the move saying the country did not need refined sugar as it had enough stocks to meet demand.

The country still has a 26 percent duty on imports of raw sugar, officials said.

"Despite the removal of duty (for refined sugar), there haven't been any imports, firstly because we don't need it, and secondly, domestic sugar prices are lower than international prices," said K. Ali Qazalbash, secretary general of Pakistan Sugar Mills Association.

Pakistan had a stock of 1.2 million tonnes of refined sugar as of Oct. 15, enough to cover its needs until December, data from the association showed.

Millers have been urging the import of raw sugar, because it costs $80 to $90 a tonne less than refined sugar and because shortages of refined sugar were not expected before next September.

But Qazalbash said deciding to import raw sugar in December might be too late as shipments would likely arrive at end-February or March when crushing of the domestic crop would be nearly finished.