The Hindu Business Line : Pak likely to buy Indian sugar

According to traders, Pakistan may soon start importing sugar from India to meet its domestic requirement and there seems to be strong possibility of the cargo moving by the land route.

Indian sugar mills, especially those with export obligation against raw sugar imported, are exploring the market in Pakistan which it is believed would need to import about four lakh tonnes over the next five months to meet rising domestic needs.

According to traders, at present, the neighbour has stocks of about 11 lakh tonnes against the requirement of 15 lakh tonnes ahead of the next crushing season beginning November.

If deals materialise, the Pakistan Government may open Atari border, an industry representative said, adding that sugar import from India through land route is not permitted at present.

"Talks are on and we don't know when the Pakistan Government would grant permission; but traders are active and enquiries have started coming in," Mr Sanjay Tapriya, Finance Director of Simbhaoli Sugar Mills Ltd, told Business Line.

Sugar mills based in north India especially Uttar Pradesh would be benefited due to time and cost factor.

Pakistan Government allowed duty-free import of raw as well as refined sugar early 2005 to augment supplies and arrest rising domestic prices. Sugar prices in the country reached a high of around (Pak) Rs 25-27 per kg.

Indian sugar mills are in a position to supply sufficient quantity of refined sugar thanks to imports of raw sugar permitted by the Government. Indian mills have so far imported around 17 lakh tonnes against which there is an export obligation.

"Indian mills are offering refined sugar at $360 a tonne on C&F basis ex-Atari border. If they permit imports through land route, the landed cost will work out to Rs 15,700 a tonne," Mr Narendra Murkumbi, Managing Director of Shree Renuka Sugars Ltd, said.

"Indian mills are also offering refined sugar at $340 per tonne C&F ex-Karachi port and landed cost will work out to Rs 14,800 per tonne. However, importers will have to bear $20 a tonne additional cost (as port expenditure and transport cost) which means actual price will go up to $360 a tonne," Mr Murkumbi said.

During the crushing season 2004-05, Pakistan is faced with a shortage of sugarcane, resulting in lower sugar production declining from 40.2 lakh tonnes to 30.6 lakh tonnes, according to reports.

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