In a tit-for-tat, the government seems to be using its option of import of sugar for ensuring supply beyond November this year, as a formal proposal is being presented before the committee on inflation in its meeting scheduled for August 16.
Sources said the government is finalising a plan to import sugar through Trading Corporation of Pakistan (TCP) as well as by private sector to ensure that sufficient stocks remain available to cater domestic demand.
They said as on August 1, the mills had 1.2 million tons sugar and Trading Corporation of Pakistan (TCP) 0.3 million tons stocks, which at the rate of 0.350 million tons per month consumption can meet local demand till November.
The officials say they were worried over sugar availability beyond November. They are convinced that the government should have stocks equal to one and half months consumption even if the mills start crushing season in November.
This would simply mean that the government may import between 0,4 to 0.5 million tons sugar for carryover stocks. The officials will present sugar situation before the committee and try to convince it that net available stocks were not enough to ensure regular supply after November and relying on the mills for early start of crushing season will be very risky.
A senior official said, "We apprehend sugar shortage by November this year and the government has to take a decision in advance to preempt any such situation". The industry has already announced to put on hold the start of crushing season till lifting of last year's stocks the government move to import sugar will deepen the controversy.
The government and sugar industry is at odds over the start of next crushing season. Both are contradicting each other on stocks lifting, availability and the prices. The sugar industry blames the government for not honouring its commitment of keeping sugar prices at reasonable level to help them dispose off stocks and make the payments to the growers. PSMA the representative body of the sugar industry claims that the government gave its representative a commitment of keeping ex-factory sugar prices at Rs 29 and local market at Rs 34 per kg, but it backed out of its commitment once the crushing season was over. The government officials simply deny that they committed with the sugar industry for keeping sugar prices at some particular level to get started crushing season last year.
Now sugar import from India has widened the gap of mistrust between the government and industry. The industry is demanding ban on sugar import from India for providing it enough space to sell available stocks and have financing for the next crushing season. The government does not seem convinced by the industry's demand and it looks determined to implement the plan of importing sugar in next few months.
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