The Hindu Business Line : Exports to Pakistan — Sugar release order likely this week

THE Food Ministry is likely to issue a notification on release of sugar for exports to Pakistan this week. This follows an assurance to a delegation of the sugar industry by the Union Minister for Food and Agriculture, Mr Sharad Pawar.

"We approached the Food Ministry last week and the Minister has agreed to hold a meeting before issuing the release order," said industry sources.

The release order is necessary for mills to supply sugar to exporters for shipment to Pakistan. This is because each mill can offload only the quantity stipulated by the Ministry each month.

The Government has released 34 lakh tonnes of sugar under the free-sale quota for the mills during the July-September quarter.

For August, the quota released is 11 lakh tonnes.

Pakistan lifted a four-year ban on sugar imports from India on August 2 to keep the rising domestic prices on leash. However, no deals have been struck yet to ship sugar across the border.

"The stumbling block in offering sugar to Pakistan is the release order. If the order is notified, then some deals are sure to be struck immediately," the sources said.

When contacted, Mr S.L. Jain, Director-General, Indian Sugar Mills Association, said mills were in a position to fulfil Pakistan's immediate need for one lakh tonnes.

Pakistan has already floated a tender for 50,000 tonnes and on Saturday, six firms were shortlisted for offers to provide Thai, Indian, Canadian, Chinese and Brazilian sugar. The lowest bidder, a German firm, has offered to sell 14,000 tonnes at $337.45 a tonne.

The other offers are, however, above $350 a tonne.

Another tender is scheduled to be floated later this month for 50,000 tonnes.

Asked about traders not being interested in exporting sugar, Mr Jain said the issue was over the price.

"Pakistani traders are looking for cheap sugar but sellers aren't ready to offer at the prices they are quoting," he said.

Sources said Pakistan traders were seeking sugar at around $360 a tonne but exporters were looking for $370-5 a tonne for delivery at the Wagah border. In the last tender in July, Pakistan had bought sugar at $366 a tonne for delivery at the Karachi port.

The sugar industry is hoping to export around four lakh tonnes. It also expects to fulfil a part of its export obligations for having imported raw sugar. The mills have an obligation to export 15 lakh tonnes.

On its part, Pakistan is looking for sugar from India as the latter could meet its immediate needs. Sugar prices there have galloped to nearly (Pakistani) Rs 30 a kg.

During the week-end, spot white sugar in London was quoted at $324.50 a tonne (Rs 14,050) f.o.b. European ports, while raw sugar ruled at $240.74 (Rs 10,625) f.o.b. Brazilian ports in the New York market.

But nearby October futures for white sugar was quoted at $285.90 (Rs 12,450) a tonne f.o.b. and raw sugar was offered at $217.59 (Rs 9,500).

In the domestic market, small sugar was quoted at Rs 1,861-1,906 a quintal and medium sugar at Rs 1,917-1,990.

Prices in the domestic market have tended to look up after Pakistan lifted the ban on sugar imports from India.

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Exports to Pakistan — Sugar release order likely this week