Country may face sugar shortage in coming months: smuggling to Afghanistan in bulk quantity

The country may face severe sugar shortage in coming months, as bulk quantity of the commodity has been smuggled to Afghanistan under the guise of brown sugar (unprocessed sugar), Business Recorder learnt here on Thursday. The price of sugar is likely to surge to Rs 80 to Rs 85 per kilogram due to the depressed prices in local market, which has encouraged smuggling to Afghanistan, thus creating a shortage in the domestic market, sources in Pakistan Sugar Mills Association (PSMA) said.
They said that the Economic Co-ordination Committee (ECC) of the Cabinet had not approved procurement of sufficient quantity of sugar from sugar millers despite their repeated request.
Sources claimed that the millers, who were earlier urging the government to procure their surplus stock, were now reluctant to release adequate quantity of the commodity in the market, as prices were increasing in the market. They said that country was witnessing shortage of sugar which would further aggravate in next few months as Trading Corporation of Pakistan (TCP) don't have sufficient quantity of sugar to meet the domestic demand till the start of new crushing season.
Sugar millers have a stock of about 1.4 million tons which includes one lakh and 25000 tons in Khyber Pakhtunkhwa (KP), four lakh tons in Sindh, besides 1.1 million tons with the miller in Punjab. On the other hand, the monthly consumption of the country is about four lakh tons. Sources said that country would face shortage of six lakh tons of sugar before the start of new crushing season, expected to start in December 2011.
They maintained that with the lower strategic stock being held, traders were now in a position to hoard the commodity which would pushed the existing price of the commodity up to at least Rs 80 per kg by July or August 2011. Sources said that TCP should have stored buffer stock of sugar in order to meet any emergency in the country, besides off loading sufficient quantity in the market as and when required to stabilise prices.
It is worth mentioning here that the Ministry of Industries and Production (MoI&P) had earlier urged the government to procure sugar from local mills through Utility Stores Corporation and TCP to build strategic reserves.