* Sugar price unlikely to come down
* Sugar production could be up 20-25% because of higher sugarcane output
By Arshad Hussain
KARACHI: In spite of the expected high production in the current fiscal year, sugar prices are unlikely to ease due to its high production cost and export of jaggery to Afghanistan through official channels.
“The Pakistani sugar industry has set a production target of 3.5-3.6 million tons for the next season sugarcane crushing for which is to begin by the middle of November this year,” said Zaka Ashraf, Chairman of the Pakistan Sugar Mills Association (PSMA), by phone from Lahore on Saturday.
“The sugar industry can easily achieve this target because of 25-30 percent higher production of sugarcane,” he added.
Because of low production of sugar in the last fiscal year, sugar price had touched Rs 45 a kg and above by the middle of 2006. But the government’s strategy to import sugar through the private and public sectors helped to bring the prices down up to Rs 33-34 a kg.
“It would be difficult for the sugar millers to further bring the prices down from this level as the government had set Rs 60 per 40 kilograms the price of sugarcane in Punjab and Rs 67 per 40 kg in Sindh,” said Iskander Khan, Chairman of the PSMA NWFP.
He said: “The federal government has levied a 15 percent import duty on sugar, but it has not accepted the long-standing demand of the PSMA to impose regulatory duty on jaggery manufacturers, nor has it done anything to stop its export to Afghanistan.”
“Around 80 percent of sugarcane in the last crushing season was used to make jaggery in the NWFP, and only 8,000 tons of sugar was produced,” he said, adding: “The price of jaggery has jumped to Rs 55 a kg in the NWFP from Rs 25 a kg.” Owing to the poor policy of the federal government in the last crushing season, the CBR had to lose Rs 800 million under the head of general sales tax and other taxes, an official claimed.
Market experts said the country would have another prices crisis during the next crushing season as the country would have 0.4-0.5 million tons of excess sugar. Now the Trading Corporation of Pakistan (TCP) has 600,000 million tons. Private importers have around 200,000 tons sugar in their warehouses. If the PSMA of all three zones achieved their sugar production targets, the country would have above 4.2-4.4 million tons of sugar against its total consumption of 3.8 million tons. The production of sugarcane is likely to be higher by 25-30 percent this year.
The sugar associations said all sugar mills would start crushing by the end of November.
In the last fiscal year the government had imported nearly 850,000 tons of sugar through the TCP compared with 98,677 tons last year.
Two years old sugar crisis is expected to end in 2007, as sugar production is likely to be higher this year than in the last two years.
Sugar price had shot up by 150 percent from Rs 18-19 per kilogram in December 2003 to Rs 45 in March 2006.
“The previous fiscal year was the worst in terms of sugar price, as its rates were all time high throughout the country because of the government’s policies,” a PSMA office-bearer said.
“The federal government has not prepared any long-term policy for the sugarcane growers nor for the sugar industry, which may create trouble for the growers and millers in the coming crushing season over the price issue,” he added.
The State Bank of Pakistan in June this year imposed a 50 percent cash margin on all loans to private traders for the purchase of sugar in a move to counter hoarding. The SBP withdrew the cash margin restrictions in October.
The federal government had imposed as ban on the export of sugar to Afghanistan, a source said, adding: “But it is still being smuggled out to Afghanistan.”
Source: Daily Times
* Sugar production could be up 20-25% because of higher sugarcane output
By Arshad Hussain
KARACHI: In spite of the expected high production in the current fiscal year, sugar prices are unlikely to ease due to its high production cost and export of jaggery to Afghanistan through official channels.
“The Pakistani sugar industry has set a production target of 3.5-3.6 million tons for the next season sugarcane crushing for which is to begin by the middle of November this year,” said Zaka Ashraf, Chairman of the Pakistan Sugar Mills Association (PSMA), by phone from Lahore on Saturday.
“The sugar industry can easily achieve this target because of 25-30 percent higher production of sugarcane,” he added.
Because of low production of sugar in the last fiscal year, sugar price had touched Rs 45 a kg and above by the middle of 2006. But the government’s strategy to import sugar through the private and public sectors helped to bring the prices down up to Rs 33-34 a kg.
“It would be difficult for the sugar millers to further bring the prices down from this level as the government had set Rs 60 per 40 kilograms the price of sugarcane in Punjab and Rs 67 per 40 kg in Sindh,” said Iskander Khan, Chairman of the PSMA NWFP.
He said: “The federal government has levied a 15 percent import duty on sugar, but it has not accepted the long-standing demand of the PSMA to impose regulatory duty on jaggery manufacturers, nor has it done anything to stop its export to Afghanistan.”
“Around 80 percent of sugarcane in the last crushing season was used to make jaggery in the NWFP, and only 8,000 tons of sugar was produced,” he said, adding: “The price of jaggery has jumped to Rs 55 a kg in the NWFP from Rs 25 a kg.” Owing to the poor policy of the federal government in the last crushing season, the CBR had to lose Rs 800 million under the head of general sales tax and other taxes, an official claimed.
Market experts said the country would have another prices crisis during the next crushing season as the country would have 0.4-0.5 million tons of excess sugar. Now the Trading Corporation of Pakistan (TCP) has 600,000 million tons. Private importers have around 200,000 tons sugar in their warehouses. If the PSMA of all three zones achieved their sugar production targets, the country would have above 4.2-4.4 million tons of sugar against its total consumption of 3.8 million tons. The production of sugarcane is likely to be higher by 25-30 percent this year.
The sugar associations said all sugar mills would start crushing by the end of November.
In the last fiscal year the government had imported nearly 850,000 tons of sugar through the TCP compared with 98,677 tons last year.
Two years old sugar crisis is expected to end in 2007, as sugar production is likely to be higher this year than in the last two years.
Sugar price had shot up by 150 percent from Rs 18-19 per kilogram in December 2003 to Rs 45 in March 2006.
“The previous fiscal year was the worst in terms of sugar price, as its rates were all time high throughout the country because of the government’s policies,” a PSMA office-bearer said.
“The federal government has not prepared any long-term policy for the sugarcane growers nor for the sugar industry, which may create trouble for the growers and millers in the coming crushing season over the price issue,” he added.
The State Bank of Pakistan in June this year imposed a 50 percent cash margin on all loans to private traders for the purchase of sugar in a move to counter hoarding. The SBP withdrew the cash margin restrictions in October.
The federal government had imposed as ban on the export of sugar to Afghanistan, a source said, adding: “But it is still being smuggled out to Afghanistan.”
Source: Daily Times
