Pakistan May Buy 1 Million Tons of Sugar After Flood Destroys Cane Crop

Pakistan, Asia’s third-largest sugar user, may import as much as 1 million metric tons next year after the worst-ever floods damaged 15 percent of the nation’s sugar cane crop, according to a farmers’ group.

Sugar mills may produce 3 million tons against a target of 3.5 million tons in 2011 because less sugar cane will be available, Ibrahim Mughal, chairman of the Agri Forum Pakistan, said in a telephone interview from Lahore. “That means we would need to import 1 million tons of raw or refined sugar to meet demand.”

Pakistan, which consumes 4 million tons of sugar a year, needs shipments to bolster supply and reduce record domestic prices. The government said in August it would allow the duty- free import of raw sugar by mills.

Floods that began in Pakistan on July 22 caused $7 billion of damage, according to Prime Minister Syed Yousuf Raza Gilani. Farm output, which was forecast by the government to expand 3.8 percent in the year that began July 1, may shrink 1.7 percent because of crop damage, Farhan Rizvi, an analyst at Credit Suisse Group AG in Singapore, wrote in a Sept. 7 report.

The government will review its stocks at a meeting tomorrow to assess the scale of flood damage to the sugar cane crop and decide whether imports are needed, said Nadeem Akram Burq, spokesman at the industries ministry.

Crop Damage

Floods in central Punjab and southern Sindh provinces destroyed sugar cane planted on 300,000 acres (121,405.7 hectares), Mughal said.

White, or refined, sugar for December delivery rose as high as $623.60 a ton, the highest price since March 3, on NYSE Liffe in London. Raw sugar for March delivery touched 23.71 cents, the highest level since March 1.

The domestic price of sugar rose 38 percent to as much as 90 rupees ($1.05) a kilogram in the past month as aid workers bought the sweetener for flood victims in relief camps, said Farid Qureshi, general secretary of the Retailers Grocers Association in Karachi.

The government has completed purchases of 1.2 million tons of refined sugar for this year, according to the Trading Corp. of Pakistan.

To contact the reporter on this story: Khurrum Anis in Karachi at

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