Sugar exports to Pakistan, stocks fears rise in India
Pakistan Times Business & Commerce Desk

NEW DELHI (India): Pakistan has allowed imports of sugar from India helping Indian sugar stocks climb but the unprecedented delay is unnerving the stake holders in India.

The efforts of powerful sugar lobby in Pakistan and the arrival of sugar from gulf and China has added to fears, Inp reports.

Indian sugar millers were licking their fingers expecting the floodgates to be opened with Pakistan lifting an embargo on imports but due to some reasons, there is no positive out come so far, sources said. Indian millers under an obligation to re-export raw sugar in the refined form smelled a huge opportunity while traders were confident of making a kill.

However, even 10 days after the announcement by Pakistan welcoming Indian sugar, sugar is not flowing over the borders. “No deals have taken place so far and I don’t see anything happening in the next one week,” said the head of a leading northern Indian sugar mill which has imported a sizeable amount of raw sugar.

Pakistan last week removed a four-year ban on sugar imports from India and allowed the state-run trading agency to buy a further 100,000 tonnes to boost its stocks. The Trading Corporation of Pakistan has floated a tender to buy 50,000 tonnes of sugar and is due to be opened on Saturday.

Pakistan has been buying sugar on international markets since January importing more than 500,000 tonnes of refined and raw sugar. But these imports failed to dent high domestic prices, which were around 27-28 rupees a kg in June, only a little below 30 rupees in February. Pakistan then turned to India, looking for some cheaper sugar to stabilize domestic prices.

Indian traders said while enquiries from private trade in Pakistan were growing, prices remained an obstacle. “Still talks are going on, I think price expectations are not matching,” said Narendra Murkumbi, managing director of Shree Renuka Sugar Mills. Traders said while Indian sugar exporters were offering sugar at the Wagah border at $370-$375 a tonne, Pakistani traders were not willing to offer beyond $355-$360 a tonne.

“That is where the matter seems to be struck but we are hopeful of some early business deals,” said one exporter. Traders said Pakistan too did not seem to be in a great hurry as the mere announcement of imports from India had sobered domestic prices. Analysts said that while traders were looking at the economic benefits of exports, prices alone might not be a factor for deals not maturing early.

They said sugar prices in India were currently firm because of a smaller sugarcane crop and the government was concerned that any large-scale exports to Pakistan might lead to a flaring of prices and fuel inflation in upcoming Hindu festival months.

Nevertheless, industry officials say with sugar production in the new season beginning in October expected to increase to 18 million tonnes from around 13 million tonnes this year sales of a few thousand tonnes would not affect domestic prices.●