The Pakistan Sugar Mills Association (PSMA) said on Monday it would respond to government proposal on reduction in sugar prices soon after consulting its zonal chapters.
A PSMA spokesman, briefing the media on the outcome of PSMA general body meeting with government policymakers on April 15, said government officials have sought industry's help to provide relief to low income people and proposed that either the industry should contribute 10 percent of available stocks to Utility Stores Corporation (USC) or provide cheap sugar directly to the market for the poor.
The spokesman said the government has offered to exempt such stocks from sales tax.
He said zonal emergent general meetings of PSMA would be held on April 19 and 22 at their respective zonal offices to discuss and forward their recommendations, which would then be discussed in the CEC meeting before submitting to the govt as a formal proposal. However, he pointed out the industry has yet to fix quantity and price of sugar to be proposed to the federal government.
He said it is an irony that the Monopoly Control Authority's (MCA) harassment to the industry is in full swing in spite of assurance given by the federal government to bring an end to this action occurring since last two years.
The spokesman also pressed the point PSMA members have yet to consider options and discuss proposal as this sugar is going to be below their production cost due to high prices of cane and farmers due amount of sugarcane has also to be recovered from sale of sugar.
He said members are also worried that an extraordinary reduction in price of this large quantity of sugar stocks would shift the burden of production cost on remaining stocks. It would be hard for them to recover the cost on other stocks, especially when sugar price issue has already become sensitive at this stage.
He further said stocks available with the USC were bought by it at a price of around Rs17 per kg and it is economically viable to sell at Rs27.50 per kg. But it would be difficult for the industry to crush sugarcane at a production cost of Rs38 to Rs40 per kg and sell sugar at Rs27.50, he added.
The PSMA spokesman expressed the hope some workable solution would be found to help the government to ease pressure of sugar price. He termed the meeting with government officials very successful.
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