WAITING FOR NEW SUGAR POLICY
By AMANULLAH BASHAR
Nov 29 - Dec 05, 1999
Contrary to the efforts made by sugar producers from 12 nations for creating a strong lobby for sugar trade liberalization at the upcoming WTO talks to be held on Nov 30, 1999 in Seattle, Pakistan has yet to announce sugar export policy for the current year.
Despite the fact that there would be no surplus sugar for exports due to drop in sugarcane crop production during current year, Pakistan's presence as a sugar exporting country in the export market is vital for future export activities.
Leaving aside current year's situation when no export surplus is available, Pakistan has gained the export market fairly explored earlier in campaign launched in 1993-94 and 1994-95 and that status should be maintained. Pakistan produced about 3.5 million tonnes of white sugar per year in the past two years. This made available exportable surplus of 700,000 tonnes each season. Industry has the potential to raise sugar production to around 7-8 million tonnes a season with improved yield of sugarcane which demonstrate the potential of the industry.
The Confederation of Sugar producers in Thailand is making efforts to constitute a Global Alliance for protection of sugar exports. A formal announcement in this regard is likely to be made at a ceremony on November 28 in Seattle, just two days ahead of the WTO talks.
The alliance would include private producers from Thailand, Brazil and Australia which would account for 65 per cent of world sugar trade.
The alliance would lobby governments to add sugar to the list of agricultural products to be liberalized if the Seattle meeting approves the millennium round of trade negotiations. Sugar experts anticipate that if the sugar trade is liberalized by WTO meeting, International sugar prices are expected to rise by 3-4 cents per pound.
It is alleged that the European Union is dumping five million tonnes of sugar on the world market and criticised the US and Japan for alleged protectionism and high tariff barriers.
In addition to Thailand, Brazil and Australia the alliance would include private producers of sugar from Argentina, Canada, Columbia, Guatemala, South Africa, Honduras, India, Panama and the Philippines.
After high level ministerial talks this week, Thailand and Australia agreed to wage a joint push in Seattle for Liberalization of the trade in agricultural commodities. Agriculture products would be the most challenging yet most important issue on the WTO agenda.
The new government is giving due importance to the agriculture sector which produces a real strength to Pakistan's economy. The farmers have been allowed electricity consumption at a highly subsidised rates white banking system has already been advised to provide agriculture loans to the farmers at the easy terms. The public sector has also been advised to intervene into cotton market to ensure fair and timely return to the growers.
In order to facilitate sugar export, the government in its export policy for sugar had enhanced input rebate from Rs1500 to Rs4500 per tonne last year.
Keeping in mind the declined sugar production this year the government has not yet announced export policy for the sugar industry this year. Keeping a mum on this subject seems an unprofessional attitude as whatever the production status may be announcement of a policy is indeed necessary to remain alive in the export market.
Mohammed Ebrahim Hasham, Chief Executive of Mehran Sugar Mills Ltd. while commenting on business expectations for next millennium said that there is potential for increasing sugarcane production through improved yield per acre and sugar production through better recovery. Sugarcane yield per hectare at an average of 50 tonnes as maximum and average sugar recovery of 8.7 per cent maximum have oth been once of the lowest with reference to the principal sugarcane and sugar producing countries.
The installed capacity of sugar production in Pakistan industry needs no further capital outlay at least for a decade. The industry has to concentrate efforts in its optimizing production capacities. Pakistan sugar industry has emerged as one of the players in the export arena.
He felt that future invariably holds promise for those who concentrate on improvements in productivity of men, money, machines and motivation. The prosperity of rural economy of Pakistan depends on the role sugar industry plays, as no other industry needs similarly to be located close to the farms as is in the case of the sugar industry.
Effective aggregate sugarcane crushing capacity per day in the country is at about 380,000 tonnes a day. At national average sugar recovery of 8.8 per cent and working of 76 sugar mills sugar production can be 5.620 million tonnes. To achieve this production level, sugarcane requirement would work out at 63.863 million tonnes. The dry weather pls 14 per cent reduction in cultivation area has however rendered the sugarcane production less than 45 million tonnes this season.
Sugar production and exports during the past two years were remarkable.