Pakistan goverment within a couple of days is likely to allow import of 0.4 million tons raw sugar as current sugar stocks can meet requirements of only one month, sources.On the other hand, sugar millers are of the view that there is a glut in the market, and mills are facing difficulties in payment to the farmers.
The Industries Ministry had advised the policy makers, especially the Finance Ministry, that the government should immediately decide about import of sugar to meet next year's requirements as the Pakistan Sugar Mills Association (PSMA) has already indicated shortage of sugar.
Sources said that Finance Ministry did not approve the proposal but asked the Industries Ministry to bring the proposal back in December. "Total stock of sugar is sufficient for only up to January 15, 2009, while the stock with the Trading Corporation of Pakistan (TCP) would also deplete during this period as it would be supplying sugar to the Utility Stores Corporation and the armed forces," sources added.
Some officials in the government believe that the country would face shortage of 1.5 million tons sugar, which has to be imported and, if the government goes for raw sugar, it can save a reasonable amount of foreign exchange besides value-addition in sugar mills.
Last year, PSMA had claimed that 1.2 million tons sugar would be surplus, but at the end of the season this claim proved wrong. About 0.6 million tons sugar had been exported, or smuggled, which is said to be one of the reasons of shortage in 2009, sources said.
The country's monthly consumption of sugar is around 0.35 million tons and the Finance Ministry, in its report to the Economic Co-ordination Committee (ECC) some three weeks ago, had stated that the country might face sugar crisis from November onward. However, new forecasts suggest that crisis may have started from mid-October. However, Finance Ministry's apprehensions proved to be wrong and the stocks are only enough till the middle of January. The government has already imposed duty on sugar export, and removed duty on refined sugar import.
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