UPDATE 1-Pakistan to import 1 mln tonnes of sugar

ISLAMABAD, Nov 4 - Pakistan will import 500,000 tonnes of raw sugar and 500,000 tonnes of refined sugar to meet domestic needs, a cabinet minister said on Wednesday.

The government would also try to maintain a strategic reserve of 500,000 tonnes to cover shortages, Information Minister Qamar Zaman Kaira told a news conference after a cabinet meeting.

Pakistan is expecting 3 million tonnes of refined sugar from the 2009/10 crop against annual domestic demand of 4.2 million tonnes, he said.

"There is a gap of more than 1 million tonnes and it has been decided to import 500,000 of raw sugar and 500,000 tonnes of refined sugar," Kaira said. He did not say when the sugar would be imported.

Kaira said imports of raw sugar would be timed so local sugar millers would have the spare capacity to process it alongside the domestic crop.

A top industry official on Tuesday said raw sugar imports had to come within weeks so it can be processed along with the domestic crop this crushing season, which usually lasts until the first week of March.

Sugar mills in the southern province of Sindh will start crushing cane from the new crop by next week, according to industry officials. Kaira said mills in Punjab province would start crushing from Nov. 15.

Out of 82 total mills, 44 are in Punjab, 32 are in Sindh and six are in the North West Frontier Province.

Pakistan produced 3.2 million tonnes of refined sugar last year, according to estimates from millers, and the country this year imported 225,000 tonnes of refined sugar to meet demand and keep prices in check.

In spite of that, Pakistanis have faced shortages since last month when the Supreme Court ordered millers to sell sugar at 40 rupees/kg (48 U.S. cents), compared with the then-market price of about 46 rupees/kg.

Government attempts to implement the court decision have led to confusion, sparking even higher free-market prices for the sweetener.

Kaira also said Pakistan was expecting a good rice crop this season with an expected surplus of 5.76 million tonnes available for export, some of it stock from the previous crop.

Government officials have estimated rice production for the 2009/10 crop to be 6.4 million tonnes.

Pakistan, the world's fifth-largest rice exporter, harvested about 6.9 million tonnes in the 2008/09 crop season, according to Food Ministry officials. (For more Reuters coverage of Afghanistan and Pakistan, see: http://www.reuters.com/news/globalcoverage/afghanistanpakistan)