0.5 million tons of sugar shortage likely

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Sugar Advisory Board (SAB) in a meeting Saturday estimated 0.5 million tons of sugar shortage during the next season mainly due to floods in Sindh and a low sugarcane yield in other provinces. Pakistan Sugar Mills Association (PSMA), one of the key stakeholders, apparently preferred to keep itself away from the hurriedly called meeting on grounds that they cannot participate without having certified data on crop production estimates which have not been compiled yet.

The meeting presided over by the Secretary Ministry of Industries, Aziz Ahmad Bilour, showed a poor attendance as no official from Sindh government participated in it. Chairman Trading Corporation of Pakistan (TCP) also sent one of the Directors to give a provincial viewpoint in the meeting.

However, the Sindh government, in its initial estimates, forecast a 30 per cent reduction in sugar production, from 1.3 million tons to 1.0 million tons, due to devastating floods across the province. "Preliminary estimates forwarded by the Secretary Agriculture Sindh indicate a possible loss of 0.3 million tons in sugar production due to a 30 per cent loss to cane crop," the sources added. Sources said the meeting discussed possible gaps in production in the light of available data collected from different sources.

Some of the participants expressed fears about a possible sugar crisis in November 2011 because of commodity shortage, but the representative of State Bank of Pakistan (SBP) challenged this theory with the arguments that 1.037 million tons of sugar produced by mills is pledged with the Bank which is sufficient till the start of next crushing season.

According to official estimates, monthly sugar consumption is 0.322 million tons. However, independent analysts believe Pakistan's monthly consumption is 0.432 million tons. A representatives of the Punjab government confirmed that they have sufficient stocks till the start of new crushing season. They were of the view that the federal government should have built strategic reserves to deal with any crisis-like situation.

The representative of Khyber Pakhtunkhawa informed the meeting that total stock with the province is about 50,000 - 60,000 tons, which is insufficient to meet the domestic requirements. However, he was of the view that KP will get sugar from Punjab to meet the shortfall.

Finance Ministry assured the meeting that it will extend all possible financial resources needed for the import of the sugar. According to Pakistan Space and Upper Atmosphere Research Commission (SUPARCO), the sugarcane crop is almost 11-month-old in Sindh and height of flood waters has touched 6-8 feet in some areas. Sugarcane is a water-loving crop. Generally, sugarcane is not damaged by flash floods. Some damage could be accrued by uprooting of the crop. However, sugarcane productivity is likely to increase with additional water supply from rains.

According to Suparco's estimates, sugarcane's total production is expected to be 53,886,000 tons of which 3,537,000 tons will be in Punjab, followed by 14016000 tons in Sindh and 4,500,000 million in KP. PSMA, however, differs with these statistics. After a detailed discussion, the participants decided to meet again once waters recede in Sindh and PSAM gets authentic crop production estimates.

Ministry of Industries had been directed by the Economic Co-ordination Committee (ECC) of the cabinet to hold a meeting with the stakeholders and come up with sugar production estimates. According to a press release issued by the Ministry, the meeting was convened to ascertain the sugar stocks position, and in particular to assess the sugar estimates for 2011-12, forecasting gaps so that timely measures may be taken to cater for any deficiency.

Secretary Ministry of Industries has said that after reviewing province-wise stocks of available sugar in the country it can be safely said that there is sufficient stock to meet the demand till the next crushing season starts and there is no urgency to import sugar right now. Punjab and KP informed the meeting that they will meet the sugar production estimates for the year 2011-12. Sindh, which is severely affected by floods this year, apprehended that the production of sugar may fall below the pre-floods estimates as 30 percent of the cane cultivated area is under flood waters. However, two reasons were put forward to support the fact that there will be no major loss to the cane crop. Firstly, the meeting was informed that this year sugarcane was cultivated on 20% more area than the previous year in Sindh.

By consensus, the consumption of sugar was estimated at 25kg per person per year and it was decided that the next year consumption estimates of sugar will be made keeping in view this figure. The representative of the Finance Ministry informed the meeting that if need arises the Ministry has allocated sufficient funds to TCP for the import of sugar.


Courtesy: Business Recorder

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