PSMA reneges on sugar supply to USC

The sugar industry has not so far responded positively to the government for providing 10 percent of sugar stocks at discounted rates for Utility Store Corporation (USC), it was learnt here.
Sources said Pakistan Sugar Mills Association (PSMA) had committed at the highest level some one and half months back to provide 10 percent of total produced sugar stocks in 2005-06 at Rs 27 per kg.
The stocks if provided would be sold to the poor and low-income group through the Utility Store Corporation (USC) at Rs 29.50 per kg for immediate relief. The government has already exempted 10 percent stocks of the mills from sales tax. This reduced the price for 10 percent of the mills by Rs 4.5 percent.
However, the PSMA is facing hard time from some of its members who differ on the issue. The dissident members questioned PSMA office-bearers in various meetings as to why they were being asked to provide 10 percent of their stocks for the government at Rs 27 kg when its rates were ranging between Rs 37 and Rs 38 a kg in the open market.
It may be added the PSMA had held series of meetings of its members to create consensus among them, but their outcome was in the negative.
The sugar mills had produced 2.65 million tonnes of sugar in 2005-06, and its 10 percent make 0.265 million tonnes. The mills have already sold substantial stocks. A PSMA fortnightly report indicated that as on April 30, its members had 1.5 million tonnes in their stocks.
The government is releasing a sizeable portion of its buffer stock through the USC at concessional rates from March last when sugar rates showed unprecedented increase.
The authorities were fully conscious that buffer stock was shrinking and if additional stocks were not arranged it could disrupt smooth supply of the monthly quota to USC. The USC is getting around 22 tonnes sugar from the TCP every month for its outlets. It''s also selling sugar through mobile units in those areas where its outlets do not exist.
The feelings in the government circle of disruption in supply was behind the government''s move to demand of the PSMA 10 percent stocks for USC consumption.