Dear Members,

I feel honoured to welcome the members of the Association here at the 46th Annual General Meeting. At our AGM’S the Association has been portraying the profile of the sugar industry highlighting the main events during the year. I am pleased to present to you the review for the year 2010-11.

Though the devastating floods in July 2010 had severe affects on all crops, but sugarcane sustained the damages and turned out to be a higher yield crop being water intensive.
The plantation Area and the crop condition of the sugarcane (2010-11) promised high production in the beginning immediately after a deficit year. The devastating floods all over the country damaged most of the crops and the infrastructure in the country, but sugarcane crop was damaged the least, though flood losses on the sugarcane crop were estimated higher in the preliminary reports, yet the prolonged humid favourable weather and the satisfactory water supply helped well the growth of sugarcane crop.

Due to mixed estimates and expectations MINFA kept their estimate of sugar production to as low as 3.1 million tonne and insisted a deficit of about 700,000 tonne. PSMA had hard time in convincing the Government of Pakistan to hold the import of sugar till at least the end of February, when the production trend would be much clear. At the same time authorities resisted the import of raw sugar meant to supplement the production to save import of refined sugar.

After delaying the decision for import of refined sugar during crushing in progress, Government of Pakistan was informed that they might need not to import sugar as the production could exceed 3.9 million tonne. Due to the delay in relaxation of import duty on raw sugar only a small quantity of raw sugar was imported for refining. The pragmatic and realistic estimates of PSMA forced the policy makers to review deficits anticipated and we had total sugar production of 4.17 million tonne.

Total scenario of the year 2010-11 was thus as following:

PSMA must convince the authorities with the negative affects of forcing these decisions. Once the price of sugarcane is based on sucrose content the growers will be attracted to sell their crop in time to fetch better price. PSMA is still looking for such modalities being discussed for the last ten years. We hope that a positive view of it will lead to progress, so as to put in place a proper recognized system to help the industry in shape to contribute to its full potential. 

Consumption in 2011-12 is projected to 4.40 million tonne. The consumption has been sluggish for the past two years due to higher prices of sugar. In short with the production estimated at 4.7 and the carryover stock about 1.1 mln. Tonne no import of sugar will be required in 2011-12. After the production situation is clear, there would be some surplus available for export and strategic reserves.

WORLD SUGAR SCENARIO
          Global sugar production 2011-12 is forecasted as surplus by about    4.0 mln.Tonne. It is widely suggested that despite a sizeable rise in the global production, the market will generally remain balanced and the world sugar market may face a fall from current world prices set to swing due to bumper crop.
There are expectations that global market may show a decline of at least    10-15% by early next year. ISO Estimate for 2011-12 is as under:
                   Production   : - 171.4 mln. Tonne
                   Consumption: - 168.1 mln. Tonne
World sugar stocks had contracted considerably in the last two seasons falling about 15 mln. Tonne thus the surplus production of 2011-12 may leave only about a million tonnes of surplus.

Brazil’s harvest (2011-12) that started mid April disappointed market expectations with cane and sugar production. The low yield and recovery has attributed to the multiple weather problems including a prolonged drought in the prime growing period and the recent prolonged frost affected severely the cane yield. It will take few years for the yield to fully recover as predicted by experts.
The cane and sugar production was revised downwards expecting lower output of sugar and ethanol as well. The downgraded forecast is now 30.6 mln. Tonne previously estimated at 32.8 mln. Tonne and fuel ethanol at 21.0 bln. Litres.

Indian sugar production is likely to rise 27.0 mln. Tonne compared to          24.6 mln. Tonne output 2010-11 continuing its upswing phase expecting 2011-12 harvest of about 360.0 mln. Tonne of sugarcane. World’s second largest sugar producer having received good monsoon combined with the recent good prices boosted the expected production in the forthcoming harvest. At the start of November 2011, sugarcane plantation stands at 5.14 mln hectares in comparison to the last year’s 4.9 mln. Hectares.
Indian export of sugar is expected to 4.0 mln. Tonne with consumption of over 23.0 mln. Tonne. Exporters are eager for export to take advantage of production delay in flood hit Thailand.

Thailand is expecting a bumper harvest of about 100 mln. Tonne which may achieve a record production of 10 mln. Tonne sugar. Thailand is the second largest sugar exporter in the world. It is now faced with worst floods in the half century which has inundated farms and is likely to delay crushing operation scheduled for mid November.

China’s purchases of sugar from the world market are expected to be on higher side. In recent months China imported about 1.2 mln. Tonne. A gap of about 2 mln. Tonne is foreseen in 2011-12. To make up for the depleted reserve stock and deficit in consumption, China’s import demand may rise to 2.75 million tonnes.

In European Union conditions for beet sugar are favourable against the weather conditions last year, thus expectations are for higher than 17.7 mln. Tonne i-e 13% higher than last year. Russian harvest is also progressing well expecting a record beet crop of about 40 mln. Tonne. 
At the conclusion of this review I would like to register my appreciation to the Zonal Chairmen the Central Executive Committee, the members and the Secretarial Staff for their continued co-operation.