KARACHI, March 24: The country is poised to achieve record sugar production at 4.1 million tons after harvesting good sugarcane crop resulting from heavy rains of last year and improvement in supply of irrigation water.

The latest figures released by the Pakistan Sugar Mills Association (PSMA) showed that total production of the white refined sugar by end of February 2004 stood at 2.875 million tons which fully substantiate the fact that production this season would exceed the four million tons mark.

With all the 76 sugar mills in Sindh, Punjab and NWFP are still running their boilers at full-scale the current crushing season is likely to give ever highest sugar production recorded in the history of the country.

"Yes we firmly believe that the country is poised to produce over four million tons of white refined sugar this season and there is a greater possibility that a huge exportable surplus of around 0.5 million tons will be available," asserted Mohammed Kasim, a leading miller of Sindh.

As the crushing season in Sindh started with two month's delay in December last year there is a greater possibility that mills will keep their boilers running up to middle of next month, he added. "Whereas in Punjab the crushing is expected to continue till end of April".

However, the sugar mills are perturbed over the sudden rise in temperature both in Sindh and Punjab and strongly feel that the current heat wave will directly affect their recovery percentage as standing sugarcane crop in the fields will heavily lose sucrose.

The industry feels that after meeting domestic consumption of around 3.1 million tons and lifting of sugar by the TCP of around 0.5 million tons still there would be a surplus of over 0.5 million tons in this season.

The first meeting of newly-established Sugar Board on March 12 with Finance Minister Shaukat Aziz in the chair decided that the Trading Corporation of Pakistan (TCP), besides 0.2 million tons, would also buy another 0.3 million tons of sugar from mills. As a result of this decision the ex-mill sugar prices slightly moved up from Rs15.25 per kg to Rs16.

However, with a glut in sugar market there was a greater possibility that the industry will run into deep financial crisis if the government does not take quick decision to lift huge unsold and surplus stocks of sugar from the mills, Mr Kasim said.

He further pointed out that as to how the industry could survive if it could not even meet its production cost which comes to around Rs16.50 to Rs17.00 per kg. "I will ask the TCP to purchase 0.3 million tons from the mills at a unified rate of Rs18 per kg instead of going for tendering which will result in losses to mills".

"There is a greater need to create buffer stocks of sugar in the country because this is equally good for consumers as well as the sugar industry which could not hold onto huge stocks. If the government does not look carefully to this issue the industry may become sick which will be a national loss," another miller said.

In India the government lifts 50 per cent of the total sugar production from the mills and the balance is left to the industry which could sell it directly in the open market.

There is a possibility that next year India may face sugar shortage as some sugar traders have already started receiving inquiries from their counterparts in India, sugar.

The DAWN