An inter- Ministerial Committee headed by Commerce Minister, Engineer Khurram Dastgir Khan on Tuesday recommended export of an additional quantity of 0.6 million tons of sugar without subsidy and subject to the condition that price stability in the market is maintained. However, Pakistan Sugar Mills Association (PSMA) has rejected the offer, saying "as we paid for sugarcane a predetermined price, without rebate we cannot export and pay to the growers".
On May 6, 2017, PSMA had approached the Commerce Ministry stating that the sugar industry had produced a record quantity of sugar leading to a surplus of 1.475 million tons which was the reason for delayed payments to sugarcane growers. The monthly meeting of the Inter-Ministerial Committee, tasked by the ECC of the Cabinet to monitor the supply, price and export situation of sugar noted with satisfaction that the strategy of the Ministry of Commerce to allow exports of surplus sugar while keeping a strict check on the prices in the domestic market has been successful and the sugar price in the country has declined for the first time in the month of Ramazan, contrary to the trend during the previous years.
"In 2016, the sugar price reached a high of Rs 70 but in this Ramazan the price is stable at Rs 56, which is benefiting the consumers throughout the country and has helped check inflation", an official statement quoted Commerce Minister as saying. The committee was briefed that the sugar price in the domestic market according to the Sensitive Price Index (SPI) for the week ending June 15, 2017 was Rs 56.30 per kg which was 11.1% lower than the level of December 15, 2016 when the export of sugar was allowed by the ECC.
The committee also observed that out of the total quantity of 0.425 million metric tonnes (MMT) allowed for export by the ECC during the current crop year, a total of 0.391 MMT sugar quota has, so far, been allocated by State Bank of Pakistan (SBP) and around 0.348 MMT has been exported.
According to the official statement, in view of the surplus sugar stocks available in the country, the committee decided to recommend the export of 0.6 MMT of sugar, in addition to the 0.425 MMT already allowed for export, subject to the condition that the price stability in the domestic market is maintained. In case of any abnormal increase in the domestic price of sugar, the committee would recommend to the ECC to stop further exports. Once 0.45 MMT out of the allowed quantity of 0.6 MMT is exported, the Inter-Ministerial Committee will meet again to review the stock/export situation and recommend enhancement of export quantities, if deemed appropriate.
"There has been a record sugar production in the history of Pakistan this year and Commerce Ministry is striving for maximum exports of sugar after fulfilling domestic needs," said the Commerce Minister. Commerce Ministry in its summary to the ECC of May 29, 2017 had recommended that in order to maintain price stability during Ramazan, the decision to allow further exports of sugar may be deferred till the last week of Ramazan.
Informed sources told Business Recorder that the committee also discussed the media campaign launched by the sugar industry either on its own or in the name of growers. A suggestion was presented that Commerce Ministry should also give an advertisement in the newspapers against the claims of sugar industry but the idea did not go through.
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