The Ministry of Industries and Production has convened a meeting of Sugar Advisory Board (SAB) on Thursday to finalise mechanism for import of raw sugar, and imposition of duty on export of cane molasses, official sources told Business Recorder.
They said that the Economic Co-ordination Committee (ECC) of the Cabinet in its meeting on January 27 had directed the Industries Ministry to invite all stakeholders, discuss sugar import volume, and duty on cane molasses export, and bring out consensus proposals before the ECC in its next meeting. Sugar prices in the local market are continuously showing increasing trend because of frequent smuggling of the commodity to Afghanistan.
Sources said that the disbanded Daily Economic Monitoring Committee (DEMC) meeting, presided over by the then Finance Minister, Naveed Qamar, had decided a couple of months ago that any decision regarding sugar import would be taken in December.
When Industries Ministry submitted its summary to the ECC on December 31, 2008, regarding import of 0.4 million tons raw sugar, the ECC not only snubbed Industries Secretary Shahab Khawja for bringing out the proposal but also turned it down, saying that domestic requirement could be fulfilled through refined sugar import. "At least 0.3 million tons of sugar has been smuggled to Afghanistan because of 'kindness' of customs authorities," said a PSMA office-bearer.
In October, 2008, the government was cautioned by both the sugar millers and the importers that sugarcane production was expected to be less, and the country would result in producing white sugar short to the tune of 1 to 1.5 million tons. However, Minfal did not pay any heed to the recommendations of the stakeholders.
Now, the price difference between raw and refined sugar is $100 per ton plus, which means the government will opt for raw sugar and allow sugar mills to convert raw into white sugar, so that their capacity is well utilised and labourers are not laid off on account of non-availability of sugarcane, said one of the stakeholders.
An expert on sugar told Business Recorder that if raw sugar was to be imported, it should be in the crushing season only, as Pakistan does not have independent refinery to refine raw sugar directly as Middle Eastern countries all have facilities to refine raw sugar.
In Pakistan, raw sugar has to be mixed with sugarcane juice only to achieve the results ie during the period of October to March only, which is cane crushing season. "The government should import and get it refined by millers at a cost to be determined, and then keep refined white sugar in stock. And if they see traders playing with the market, the government should start selling it in local market and keep control on prices so that masses are not effected with local sugar price rise," said a leading importer from Karachi.
Some of the stakeholders are suggesting to the government to import up to 1.5 million tons raw sugar to meet local requirements. The ECC also decided on January 27 that the proposal regarding imposition of 25 percent export fob duty on cane molasses should be re-examined by all stakeholders. This issue will be discussed by SAB.
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