LAHORE, Aug 27: The ex-mill rate of local sugar eased to Rs27.60 per kg on Monday as the government dispatched samples of Indian sweetener arriving via Wagha for quality check.

The step follows allegations that the Indian commodity is unfit for human consumption because of its high sulphur content.

“As much as 2,400 tons of Indian sugar has already arrived at Wagha and we are expecting another 7,500 tons to come over the next few weeks,” Sugar Dealers and Importers Association Chairman Rana Ayub told Dawn.

The local sugar producers are feared to suffer losses if and when imported sugar hits the market after completion of quality tests.

“The local sugar is losing value on reports that Indian product has already arrived at the Wagha border,” said a sugar trader.

He said the customs authorities had already dispatched samples of Indian sweetener for laboratory tests, and a report is likely to be released by Wednesday.

“We are hopeful that Indian sugar will hit the market before the end of this week,” he said.

He said the Indian product would be available to consumers at a lower price than the local sugar.

“We haven’t calculated the price, so far. So I cannot give you a definitive rate. But it will be surely cheaper than the local sugar, said Mr Ayub.

He said importers of the Indian commodity were ready to put their imports through any test to establish quality of the sweetener to remove public fears created by unfounded allegations levelled by the local industry.

The sugar industry has long been clamouring against the import of Indian product on two counts: a) it is unfit for human consumption owing to its very high sulphur content, and b) it will be sold at a lower rate than the local product since it is being brought in at cheaper rates and will cause their prices to crash.

In a letter addressed to Federal Board of Revenue (FBR) Chairman Abdullah Yousuf last week, the Pakistan Sugar Mills Association (PSMA) had pointed out that the trade policy prohibited import of goods that do not meet the national quality standards or regulations as prescribed in respect of similar and domestically produced goods.

The letter also pointed out that Pakistan Society of Sugar Technologists had categorically stated that Pakistan produced class “A” refined sugar in accordance with the specifications laid down by the Pakistan Standards Institute (PSI).

The PSMA also alleged that the Indian product was substandard, urging the FBR to ensure that the Indian sweetener must meet the PSI standards of class “A” white refined sugar produced domestically.

“It is a pity that Pakistani industry is striving to sell stocks at lower than its production cost and is suffering huge financial losses, but due to tariff imbalance, traders are trying to take advantage of the situation and devastate the market,” a miller, who asked not to be named, said.

An immediate ban on sugar import from India is the only answer because under this looming threat the local industry will not be able to start crushing on time in the presence of unsold stocks.

Meanwhile our reporter Sher Baz Khan reports from Islamabad that the Pakistan Sugar Mills Association (PSMA) has demanded an increase in retail sugar prices from Rs30-31 per kg to a minimum Rs35 ahead of Ramazan.

The association has made frequent visits to Minfal and held meetings with some high-ups to lobby for its cause.

The association’s representatives are set to discuss the price hike demand when they meet Prime Minister Shaukat Aziz in Islamabad on Tuesday.

Sources said the government was contemplating the option of importing 400,000 to 500,000 tons of sugar from India via Wagah border. However, the risks attached to this decision were greater than the benefits of increasing the level of domestic stocks.“Once our warehouses and stores are filled with sugar, do you think the sugar mill owners will accept the government and farmers’ longstanding demand of starting crushing in the middle of October or November. No way,” said an official privy to a high-powered committee constituted by the prime minister and headed by his adviser, Dr Salman Shah.

Resultantly, farmers would continue to suffer as the sugarcane crop would stand in their fields for longer than required and they would not be able to sow another crop meanwhile in the same land, he added.

The committee was constituted to discuss the option of importing sugar via the Wagah border as an attempt to keep prices stable during November and December.

A Minfal official said the local stocks with sugar millers and the Trading Corporation of Pakistan were 1.2 million tons last week, sufficient for the local demand for the next four months or so.

A round of informal and formal meetings has already kicked off between the government and the PSMA over the last few weeks and the government is hoping a give-and-take deal in the coming weeks by accepting the long-standing demand of the PSMA by linking sugarcane prices with the sucrose level in the crop.

The millers, on the other hand, will be asked to ensure the timely start of the crushing seasons which are normally delayed for months.

The sources said that the import of the Indian sugar was a pressure tactics which the government was applying to make the millers agree to quite a few of its demands that also included timely payments to farmers. But, it has limited options of beating the sugar industry in this game.