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50,000 tons sugar export under study
KARACHI, April 10: Pakistan is considering
exporting at least 50,000 tons of refined sugar
before June to reduce surplus stocks and support
sagging domestic prices, a government official
said on Friday.
Pakistan's refined sugar output is expected to hit
a record 3.8 million tons in the 2003-04
(November-April) season, against 3.58 million tons
in the previous season, according to industry
officials.
With annual demand pegged at 3.324 million tons,
the bumper output has pushed the price down to
Rs15 ($0.3) per kg, which is below production
costs, from Rs18.50 in October, traders said. "We
have surplus production of at least 500,000 tons
of white sugar," said a senior official at
Pakistan's Ministry of Production and Industries
who asked not to be identified.
"Export of 50,000 tons on immediate basis is under
consideration," he said. High cane prices and
production costs make Pakistan's sugar exports
uncompetitive on the world market. "The exports
will not yield any profits...but will support
domestic prices and will provide some storage
space for the new production," the official said.
London May sugar futures are currently at around
$226 per ton, or lower than the prices in
Pakistan. If the plan goes ahead, exports would be
conducted through the state-run Trading
Corporation of Pakistan rather than private
traders. The trading firm had exported 100,000
tons of refined sugar in 2003.
"Exports through private traders are not feasible
because high production cost makes our sugar
prices well above the international prices," the
official added. Attempts by Pakistani traders to
export sugar in the past have largely failed
because of high costs. A trade official in the
port city of Karachi said the arrival of Brazilian
sugar by the second week of May would hit world
prices.
The DAWN
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Pakissan.com; Advisory Point
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