Government plans to buy sugar from Brazil as smuggling drains local stock

LAHORE: The government has initiated a process to import 100,000 tonnes of sugar from Brazil in September after failing to curb its smuggling to neighbouring countries, The News learnt on Monday.

The Trading Corporation of Pakistan (TCP) with the Pakistani Trade and Investment Counsellor in Sao Paulo Brazil informed that the government of Pakistan has been exploring the options of white refined sugar procurement. Since, Brazil is one of the largest sugar producers and in the past had supplied white refined sugar to Pakistan, the government could procure sugar from there on both government to government (G2G) or through private sector participation.

The TCP has requested the trade counsellor to approach the potential sugar suppliers of Brazil for supplying 100,000 metric tonnes to Pakistan in September 2023.

“It is requested to kindly approach the potential sugar suppliers/relevant government agencies for availability of sugar for shipment(s) of 100,000MT sugar to Pakistan in September 2023 on CFR Karachi basis along with specifications, payment conditions or any other terms and conditions,” Executive Director TCP Riaz Ahmed Shaikh wrote to the Trade and Investment Counsellor in Sao Paulo, Brazil Waqas Alam.

Shaikh also provided Alam with the details of the companies in case of G2G as well as private sector with reference point. It should be noted that as per official figures, the country produced surplus sugar, and the Economic Coordination Committee (ECC) allowed the exports of 250,000 tonnes to earn much needed foreign exchange.

The ECC of the Cabinet gave a go-ahead to export 250,000 tonnes of sugar with the condition that the Pakistan Sugar Mills Association (PSMA) ensures that the prices of the sweetener do not exceed Rs85-90/kg in the domestic market.

PSMA Chairman Zaka Ashraf, responding to queries regarding the need for sugar import, pointed out that the government was late in allowing sugar export. The government did not allow 1 million tonnes of sugar exports to the industry, and the country was unable to benefit from $1 billion worth of foreign exchange earnings due to the denial.

After a year, the government allowed to export 250,000 tonnes of sugar. But instead, smugglers sent abroad 600,000 tonnes, which they bought at Rs80/kg and sold for Rs160/kg in Afghanistan.

“Until our domestic sugar rates are not compatible with neighbouring countries, neither will farmers grow more cane nor can sugar be produced for our needs and exports, both,” Ashraf claimed.

Riaz Ahmed Shaikh said that the situation remained volatile, and it was an anticipatory exercise to keep abreast of situation of sugar availability in the international market and procedures to procure it in case of any need. “The TCP has initiated the process on its own,” he said, adding that so far, no response has been received from the Pakistani Trade and Investment Counsellor in Brazil.

Meanwhile, an official of the Punjab food department said that after sealing provincial borders and restricting the interprovincial sugar moment without permission, sugar smuggling was under control in the province.

He mentioned that timely intervention of the provincial government has stopped sugar smuggling from Punjab, otherwise the Punjab sugar mills would also be dried. Currently, more than 1.2 million tonnes of sugar is available in Punjab, which is sufficient to meet the province’s sugar demand till November, when the new sugarcane crushing season would be begin, he added.