Condition of 50 percent cash margin irks sugar millers, importers

July 31 is the last date for importers and mill owners for payment of 50 percent outstanding sugar loans as they have been formally served notices by commercial banks to meet the deadline to avoid default and subsequent punitive action.
Notices have been served by banks on the importers and mill owners as a follow-up of State Bank's (SBP) directive regarding the condition of 50 percent cash margin for sugar production and trade.
Sources said that the importers have been running from pillar to post to seek extension in the deadline of July 31, for cash margin, but the response so far is nothing but disappointment.
Talking to Business Recorder an affected importer said: "We were assured of relief in 50 percent cash margining conditionality, but the response is zero. That's enough to push us into deep trouble."
Officials concede that importers' case is different from sugar mill-owners. They said that importers had placed orders for sugar import on government's request to help it improve supply to market to check the upward trend in the prices.
Contrary to this, the mill owners were behind the move that pushed up the rates and fleeced the consumers for several months, besides creating embarrassment for the government. They said that the mill owners were so puffed up by money making spree that they did not miss any opportunity to lash out at the government authorities.
Pakistan Sugar Mills Association (PSMA) office bearers kept on accusing the government functionaries of mishandling the sugar situation to create a serious crisis. They might have been thinking that the game of money making will continue for indefinite period, but the situation took a U-turn forcing them to appreciate those officials who were under their attacks by the last month simply for exposing their cheap methods for extorting money from the poor consumers.
The officials added that SBP condition of 50 percent cash margin was the only factor that forced the mill-owners to come to terms with the government policy.
They said: "The PSMA statement favouring the government ahead of its meeting with SBP Governor Dr Shamshad Akhtar was meant to seek some concession from her in the cash margin conditionality and the deadline of July 31 for payment of outstanding loans against sugar stocks".