The Ministry of Industries and Production is reportedly deeply concerned over the sugar mill owners'' delay in starting crushing from November 15, an agreed deadline between the government and the representative body of the mill owners, informed sources told Business Recorder.
The sources said that the government has conveyed to Pakistan Sugar Mills Association (PSMA) and mill owners individually that it will take action against those mills, which will not start crushing from November 25. In Punjab only three mills out of 42 have started crushing and the same number have started operation in Sindh, out of 29 mills. In North West Frontier Province (NWFP) two mills had started crushing out of seven mills till November 22, the sources added.
Earlier the government had decided to seek a ''written guarantee'' from PSMA that it would start crushing operation from November 1 which was later revised to November 15 on the insistence of sugar mill owners. The written agreement may have been the consequence of the failure of the mill owners to keep their promises.
Sources said the government is yet to finalise its proposal for import of sugar for next year, adding that Prime Minister''s Advisor on Finance, Shaukat Tarin may allow it in December. Industries Secretary Shahab Khawaja is reportedly pressing the Finance Ministry to allow import of one million tons of raw sugar as calculations indicate that raw sugar would be cheaper than refined sugar.
"We are expecting shortage of 1.5 million tons of sugar, which we have to import. If we go for raw sugar, we can save a reasonable amount of foreign exchange besides value-addition in sugar mills," said one of the officials in the Finance Ministry on condition of anonymity.
Last year, PSMA had claimed that 1.2 million tons of sugar would be surplus but at the end of the season this claim proved untrue, the official stated. He said that about 0.6 million tons of sugar had been exported or smuggled as the opening balance stood at 0.936 million tons this year. "We have to decide in principle now what should be the size of sugar strategic stocks with the TCP. Should it be for one month or two months," the official proposed.
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 start from mid-October.
The government has already imposed a duty on sugar export, and removed duty on refined sugar import. There is strong impression in the official circles that PSMA is using its political clout to delay some of the decisions that would lead to the imposition of a maximum sugar price. Withdrawal of the summary from the ECC approved agenda was indicative of their successful lobbying said another official.