0.2 million tonnes sugar export may cause Rs 700 million loss: ECC decision on April 5

The government will suffer a huge loss of about Rs 700 million in case the proposal to export 200,000 tonnes sugar goes through.
A meeting of the Economic Co-ordination Committee of the Cabinet is scheduled to be held at Islamabad on Monday and the proposal would be before it. The meeting has to decide whether 0.2 million tonnes sugar, or more than that, should be exported.
Industry sources are of the view that there is surplus of 0.5 million tonnes sugar. They want that this whole quantity should be exported.
They think that export of more sugar would help the local market to settle because the present glut has affected the prices due to which the mill owners are suffering heavy losses.
If the government gives a green signal for exports, the international price at present is about 210 dollars per tonne.
The shipment of one tonne will cost the government about Rs 15,500. As against this, the recovery from export would be about Rs 12,000 per tonne. Therefore, the loss would come to Rs 3,500 per tonne.
In case 0.2 million tonnes sugar is exported through Trading Corporation of Pakistan (TCP), the total loss will amount to Rs 700 million. If more sugar is exported there would be more loss.
There is a fluctuation in the prices of the commodity in the world market. The price has recently jumped up to 210 dollars per tonne. If there is some delay, the prices may again go down. In that case, more loss would be inevitable.
Market sources are of the view that this loss would no doubt help the prices stabilise in the local market, which at present range between Rs 15 and 16 per kg. The mill owners are of the view that after the glut is done away with, the ex-factory price would touch the figure of Rs 18 per kg.
According to the fortnightly report of Pakistan Sugar Mills Association, sugar production as of March 15 stood at 3.361 million tonnes, out of which sugar mills have 2.282 million tonnes stocks.