960417

India's entry jeopardises

Pak molasses export

to EU states

ANWAR RAJANI

KARACHI: The export of molasses has practically come to a standstill, it is reliably learnt.

The reason is that unexpectedly, India has entered the world market and has started giving a tough competition to Pakistani molasses.

Total production of molasses this season is expected to touch the level of 14 lakh tons. Of this, exporters are reported to have purchased about 10 lakh tons from sugar mills. They have been able to sell about 8.5 lakh tons for shipment upto May or early June next.

The exporters have already shipped 6.5 lakh tons valued at 52 million dollars. At present, about 5 lakh tons of this commodity is lying with them and the sugar mills in Sindh and Punjab.

The local exporters now sitting on 1.5 lakh tons unsold stock, are now battled. There appears no hope for the resumption of the sale in the near future, according to market sources.

The total production of molasses in India this year is reported to be about 70 lakh tons. India is selling cheaper in comparison to Pakistan. Besides, the quality of Indian molasses is reported to be a bit better than that of Pakistani molasses. India is contracting sales at lower FOB prices. The main buyers are European Union countries.

Sources said that European buyers for the time being have abandoned the supplies from Pakistan and have converged on Indian molasses.

Since January 1996, India has exported about 0.40 million tonnes and are continuing to struck deals at regular intervals at FOB prices ranging between USD 60 to USD 70 per tonne for deliveries upto September 1996. It is reported that so far contracts for 0.70 million tonnes have been made.

During December 1995, there was a temporary surge in prices due to reports of sugarcane crop damage in Philippine and Thailand which were hit by hurricane and floods and also on account of all time high prices of grain, an alternate ingredient for cattle feeds. But for Indian supplies the prices would have been stabilised. It remains to be seen how for Indian surplus will last, and once monsoon sets in India, the supplies may be restricted and then resumption of the trade in local molasses is anticipated.

The world trade for molasses is limited to about seven million tonnes, of this 3.50 million tonnes is imported by European Union Countries annually, 40 percent of which is supplied by Thailand, Indonesia and Pakistan.