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Pakistani importers neglecting sugar from India

Pakistani sugar importers are holding back from accepting booked orders of Indian sugar as improved domestic production has softened prices in the local market, officials and dealers said on Tuesday.

"Weak domestic prices have forced sugar importers to not lift their consignments, which are stranded at the Indian border town at Wagah," said a dealer in the southern port city of Karachi.

Estimates for the amount of Indian sugar stranded at the border were not immediately available.

A senior customs official from Punjab province's capital Lahore said importers had not submitted the necessary paperwork to allow the Indian sugar into Pakistan.

"We did not receive any bill of entry from (sugar) importers during the last one week," he said.

The Pakistan Sugar Mills Association says domestic sugar production in the crop season (June/April) to March 31, 2001 stood at 2.43 million tonnes, up 20,000 tonnes compared with the same period last year.

Prices of white refined sugar have declined to Rs 24 per kg in Sindh province and Rs 25 in Punjab, after hitting a high of Rs 32 per kg last November.

INDIAN SUGAR SAID TO BE UNVIABLE

The Karachi dealer said current market conditions had made Indian sugar unviable as prevailing low prices had reduced profit margins for the importers.

"It's simply a supply and demand mechanism and low demand has pushed the prices down in local market," he added.

A government official in northeastern Punjab province said traders, who had valid letters of credit for the sugar imports, were reluctant to receive their sugar consignments from India.

Pakistan initially estimated a sugar shortfall of one million tonnes in the current season and last August allowed for the import of 600,000 tonnes of sugar from India to make up the balance.

In March, it reimposed a ban on the import of Indian sugar, a move in line with demands from the local sugar industry.

However, authorities said Indian sugar imports would still be permitted for those traders who opened letters of credit before the ban came into force on March 8, 2001.

Traders said the market had been expecting Indian sugar arrivals up until the third week of April.

"Things have changed now and importers are waiting for prices to pick up some strength before they lift their orders," one trader said.

Pakistani sugar mills have processed 2.75 million tonnes in the current season, of which 316,000 tonnes was imported raw sugar, mostly from India.

Traders in Punjab said some sugar mills in the province still had stocks and were still crushing cane.

Pakistan's annual sugar demand is around three million tonnes and the country imported over 600,000 tonnes of white sugar last year after producing 2.45 million tonnes.

The shortfall in Pakistan, which had exported sugar in 1998 and 1999, mostly to India, was due to a decline in cane planting.

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