Millers cry wolf over sugar import

ISLAMABAD (Reuters) - Pakistani sugar mills have asked the government to impose a 35 percent duty on imported sugar, fearing plunging global prices could lead to a flood of cheap imported sugar. Pakistan is buying sugar from the international market after a forecast that production would be significantly less than demand. It has offered private traders tax breaks if they imported 750,000 tonnes of white sugar before June 1. But private traders showed reluctance when the offer was made in January, when global sugar prices hovered around record highs. But, millers fear plunging prices may now encourage them to import, even beyond requirements. A trader who needed 2,000 tonnes will now tend to import 4,000 tonnes because of the low global prices and such traders will flood the domestic market, Iskandar Khan, chairman of the private Pakistan Sugar Mills Association (PSMA), told Reuters. We have requested the government to impose a 35 percent regulatory duty on the commercial import of sugar to guard against dumping. Millers say they had to pay a very high price for sugarcane at the time of the crushing season, that started in November, when farmers demanded more amid high global prices. If the commercial traders are allowed to flood the market, domestic prices will plunge and it will kill us, Khan said. Millers owe billions of rupees to sugarcane farmers and have loans to pay, he said. Traders say falling global sugar prices apparently compelled the state-rung Trading Corporation of Pakistan (TCP) to delay the opening of a 200,000 tonnes sugar tender to April 17, from March 27. The TCP, which is importing sugar to meet a shortfall, bought 200,000 tonnes of sugar last week at $596.10 a tonne, cost and freight, from the UAE-based Al-Khaleej company. The trading agency bought 50,000 tonnes of white sugar at $649 a tonne earlier in March, and another 50,000 tonnes at $779.95 a tonne in February. The TCP went on a buying spree after a forecast the country would produce about 3 million tonnes of white sugar from the 2009/10 crop against annual demand of 4.2 million tonnes. The TCP said in February it would issue more tenders in April if private traders failed to bring in supplies. Khan said millers would have no objection to the TCP buying sugar to build up buffer stocks, taking advantage of the low international prices.

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