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New dimension

The PSMA-SZ keeping track of declining sugarcane crop tendency considered materially supportive ways and means to overcome its growing menace. Keeping overall national interests in sharp focus, PSMA-SZ proposed for import of raw sugar in place of refined sugar and to the extent of fairly assessed deficit of indigenous sugar production in squarely meeting the domestic demand for it. The proposal was floated (a) to save forex expenditure by about US $ 40 per ton of sugar to be imported, being difference between refined and raw sugar price, (b) to enable sugar industry perform at higher operational efficiency on achieving higher capacity utilisation, (c) to improve  contribution in gross domestic product by value-addition in raw's processing into refined, (d) to extend employment time span and all the more, (e) to strike well balanced equation in supply of sugar to domestic demand scale.

The proposal seen pragmatic received an instant approval of the federal government. The PSMA-SZ express its gratitude to the federal government for a favourable consideration and decision, particularly of the federal minister of commerce, industries and production and the ministries which evaluated the proposal on positive note.

The Government of Pakistan initially, on October 07, 2000 allowed import of 500,000 tons of raw sugar and the volume was later on March 21, 2001 raised by 100,000 tons to 600,000 tons. This indeed helped in achieving the objectives envisaged. During the season sugar industry processed 568,323 tons of raw sugar and procured additional refined sugar of 528,651 tons from this source.

By processing of 568,323 tons of raw sugar, the sugar industry could arrange in aggregate sugar supply of 3,012,770 tons. This ought to have been considered as an adequate supply of sugar for the country in meeting demand during 2000-01 season.

Aggregate sugar production

Raw sugar import was not confined to the sugar industry, though this seemed imperative as usage of raw sugar without properly processing it was unwise. Due to this, some sort of hiccup and hassle interrupted in its timely and precisely desired usage. It has been the maiden feature. So some unforeseen irritants in handling the shipments to mills site from port were encountered. Now, being wiser by this good experience, the sugar industry is capable to overcome them if such event recurs. Priority and preference by the sugar industry invariably remain in cultivation of adequate volume of sugarcane in Pakistan, so as to have sufficient sugar produced from domestic crop source to herald happy tidings for all, particularly the interests associated with sugar.

Sugar supply

The purpose of import of raw sugar was precisely to prevent import of refined sugar and also perceptibly line up supply of sugar corresponding with the national requirement. This core principle was not perfectly observed. Import of 650,478 tons refined sugar was liberally allowed by the government of Pakistan with a view to overcome 'short fall' of a short run. In the wake of huge surplus of sugar in India and lots of large floating stocks, dumping design was unleashed, which could be gauged by huge imports of refined sugar during the sugar year of October 2000 to September 200l. It was at a huge cost of US $ 174.588 million in form of scarce foreign exchange. The imports were right in the beginning of the season and at intervals during the year.

Sugar supply scenario represented a plenty of stocks afloat, influencing down trend in price line. High cost of sugarcane due to short crop, repetitive interruptions in normal supplies of sugarcane compelling in turn for use of costly furnace oil by the sugar mills and declining graph of price line of sugar grinded the sugar industry, to book losses in consequence.

Sugar availability for the 2000-01 season set a record at 3,659,798 tons compared with the annual national requirement of about three millions tons. It created a surplus of nearly 700 thousands tons, which was bound to have its adverse impact on price line of the domestic product.

Sugar availability scenario

Sugar availability far surpassing the national requirements, emanating from liberal imports of refined sugar and their untimely scheduled arrivals disrupted normal sales of the national sugar industry. Lifting of sugar from the national industry was disrupted.

Monthwise lifting of sugar

Due to low level of lifting, particularly in the period of their usual accelerated pick up, cost of carrying larger than due and unexpected sugar stocks, also for longer duration, affected liquidity alongwith raising debt service dent. The sugar industry was compelled, in the situation, to sell sugar at cascading price trend. The wholesale sugar prices in Karachi market clearly portray this odd situation.

Monthwise wholesale price trend per kg. of sugar

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