ISLAMABAD (Pakistan News Service) – The government of Pakistan has accepted a deal with Tajikistan for export of sugar from the reserves of Trading Corporation of Pakistan (TCP) at $597.90 per ton, a price which is less than the rate prevailing in the international market.

According to estimates of the Pakistani government, the TCP will have sugar reserves of 332,057 tons on December 1 this year and 2.71 million tons will be available in the domestic market with the arrival of fresh production. Total stocks at hand will be 3.04 million tons, which would be sufficient to meet the country’s requirements until April 8, 2013. The country’s consumption stood at 350,000 tons per month.

The decision came after the Tajikistan prime minister sent a letter to Pakistan’s premier, expressing the desire to purchase 30,000 tons of sugar in a government-to-government deal, documents show.

Due to shortages, Pakistan had set restriction on export since 2009. However the Economic Coordination Committee (ECC) of the cabinet, in a meeting held on August 7, considered the request and eased the ban on sugar export to pave the way for an agreement with Tajikistan on sale of 30,000 tons. As a goodwill gesture, the committee approved a price of $597.90 per ton, which was about $20 per ton lower than the price in the international market these days. However, the export price was better than rates in the domestic market. Tajikistan will bear the entire transportation cost.

As is true in many countries, the Government of Pakistan is heavily involved in the sugar industry, regulating mill construction, trade and prices, and influencing farmers’ crop decisions in various ways. One reason for the large government involvement with sugar is the political importance of the crop. Sugar is also the second most important cash crop in Pakistan after cotton. Self-sufficiency in sugar is a goal, but one that to date has proven illusive. The major sugar crop is sugarcane, but there is a small sugarbeet industry in the cooler high elevations of the Northwest Frontier Province.