Mills have all-time high sugar stocks

With record sugar production of 3.361 million tonnes as on March 15, stocks available with the mill owners have piled up to 2.283 million tonnes.
This is the highest unsold stock in Pakistan's history and more than enough to block growers' payments and banks seasonal loans.
With almost one month in hand, the mill owners expect another 0.9 million tonnes sugar production before crushing season comes to an end.
Crushing season in Sindh ends by the first week of April, but it continues to add to net production, as industries in Punjab and NWFP remain operational for another two to three weeks.
Industrialists believe that Pakistan's sugar production would stand over 4.2 million tonnes this year, which would be roughly 0.6 million tonnes more than its yearly consumption.
By adding 0.361 million tonnes of last year's carryover stock, net surplus would be close to one million tonnes in September 2004.
Each coming day is bound to add to industrialists woes since each kilogram of sugar produced by them is increasing their loss at Rs2 per kg.
Soaring stocks have reduced ex-factory price to Rs 15.50 (inclusive of 18 percent sales tax).
Buying of commodity through the Trading Corporation of Pakistan (TCP) was industrialists only hope of good days, but it has proved hopes against hopes since Economic Co-ordination Committee (ECC) of the federal cabinet could not meet for the last two weeks to grant approval to a suggestion of the TCP involvement to pick up 0.3 million surplus stocks from the mill owners to help them in clearing their dues to the growers and keep the seasonal operation intact.
The government had constituted a 12-member committee to look into the situation arising out of lowering down of commodity prices in the open market.
The committee had suggested to the government a two-pronged strategy to resolve the problems of sugar sector - short-term and long-term vision.
Picking up of 0.3 million tonnes sugar through the TCP was a short-term measure and it was meant to ensure payments to the growers.
The plan included a tight schedule, which made it mandatory for the TCP to complete legwork for the job and ensure payments to the mill owners by April 30, and in return the industrialists were required to clear the payment for the current crushing season by June 30.