PSMA demand to discontinue duty-free import rejected

The government has turned down Pakistan Sugar Mills Association's (PSMA) demand to discontinue import of raw and refined sugar. Sources said that rising trend in sugar prices was the main cause of rejection of the PSMA case. They said that the government had studied the PSMA case sympathetically and, after review of sugar stocks and market trend, reached the conclusion that import of sugar was the only way out to check the upward trend in prices to protect the consumers.
They said that the government was seriously concerned over the increase in sugar prices "and wants to continue with its policy of duty-free import" of sugar till such time as the market becomes stable and consumers get the commodity at reasonable rates.
The authorities apprehend that discontinuing import can fuel speculations, which may push up sugar prices to create panic in the market. They quote PSMA's December 23, 2004, meeting held in Lahore which ended up in increase of Rs7 per kg in sugar rates.
They say the government can not be a mere spectator to the situation wherein sugar prices go up overnight by Rs7 per kg.
The government circles are vigilant to the sugar market day-to-day development and believe that millers have formed a cartel to exploit the market thereby fixing sugar prices on their own.
These circles say that unprecedented increase in sugar rates during the last week of December 2004 and early January 2005 forced the government to allow duty-free import of raw and refined sugar, and it will continue till prices stabilise in the market.
Sources quoted the PSMA letter, addressed to the minister for production and industries wherein it drew the attention of the government towards duty-free import of refined and raw sugar.
The letter reminded the minister of a meeting held on February 24, wherein the PSMA had conveyed to him its members' concern over import of raw and refined sugar and demanded its withdrawal.
They referred to the PSMA figures quoted in the letter that after import of 0.37 million tons sugar and last year's carryover, stocks which would be available for the current year would amount to 4.32 million tons against consumption of 3.6 million tons.
Authorities questioned that if surplus stocks were available in the market then why sugar rates were going up unabated.
Authorities turned down the PSMA claims that duty-free import of sugar was meant to hurt the local industry.
They said that how the government, which lifted huge surplus last year to pull the industry out of financial crisis, could hurt it through import of sugar.