With Pakistan continually facing huge food crisis after hike in prices of wheat flour and rice, the prices of sugar have also been surging mainly because of the production of sugar this year has declined by 15 per cent so far.
According to reports from the Pakistan Sugar Mills Association, the production of sugar is likely to be only 70 per cent of last year owing to the limited production of sugarcane by the farmers, adding that their production cost also increased due to a five per cent increase in the government’s sugarcane rates and five per cent sales tax.
To control the surging prices of sugar that have been pestering the market, Pakistan government seeks to import at least 300,000 tons of refined sugar. Pakistan’s Sugar Advisory Board (SAB) decided on the movement to ensure that 300,000 tons of refined sugar is imported in order to maintain a strategic reserve of sugar, while giving the market some breathing space at the same time.
India stands amongst the key global sugar producers holding surplus sugar stocks and is just waiting to strike when the iron is hot especially when the scenario of deficit in supply has come in picture. This would not only make the reduce sugar stocks in India but also stimulate the global sugar prices and demand supply scenario.
Currently the surplus sugar stocks in India are approximately 10 million tonnes after exports of 4 to 4.5 million tonnes which is expected though the Indian government has approved a sugar subsidy to encourage sugar exports of upto 6 million tonnes. In the event to fulfill the import requirements of Pakistan, if India exports sugar to Pakistan it may not just be a stop-gap solution to reduce sugar stocks but shall be an advantageous situation for Pakistan as the imports can reach quickly to control the surge in the domestic sugar prices in Pakistan.
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