Government allows sugar export

RECORDER REPORT

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved the allocation of an additional 50 MMCFD gas to Thermal Power Station Guddu (TPSG/GENCO-II) and allowed the export of 225,000 metric tons of sugar till March 31, 2017.

The meeting chaired by Finance Minister Ishaq Dar considered a proposal of Ministry of Petroleum and Natural Resources regarding allocation of around 50 MMCFD additional available gas from Habib Rahi Limestone (HRL) reservoir to Thermal Power Station Guddu (TPSG/GENCO-II) subject to installation of compression plant by TPSG/GENCO-II and allocation of an additional up to 26 MMCFD available gas from HRL reservoir to an old plant of M/s Engro Fertilizer Ltd for continuation of the plant.

The Finance Division apprised the ECC that State Bank of Pakistans (SBP) principal debt amounting to Rs54.46 billion, outstanding against Zarai Taraqiati Bank Limited (ZTBL) as on December 31, 2015, is being converted into redeemable preference shares carrying a profit of 7.5 per cent per annum, redeemable in 10 years in one bullet payment on December 31, 2025.

The meeting approved issuance of a guarantee of Rs54.46 billion by the government of Pakistan in favour of SBP for principal debt of the preference shares and returns thereon.

The ECC also decided to allow export of 225,000 metric tons of sugar from the surplus available after ascertaining that there would be 1.23 million metric tons of surplus sugar available in the country.

Sources on condition of anonymity said that Chairman Privatization Commission and Special Assistant to Prime Minister on Law Barrister Zafarullah did not support the sugar export and expressed fear that the decision would lead to an increase in the prices of commodity in the local market. They added the government had allowed export of 0.5 million tons of sugar in last December but the total export was only 250,000 metric tons.

Director General Media, Ministry of Finance, said after hearing the viewpoint of some of the participants, the finance minister directed the commence minister to ensure that there are adequate checks and balances available to maintain the price stability in the domestic market at the current level.

In case the domestic price stability is disturbed, the Ministry of Commerce would bring a summary to consider canceling the export permission to sugar exporters. Unlike previous years, it was decided that there will be no freight/export rebate payable by the government to sugar exporters on such exports. Furthermore, only those mills will be allowed to export which have cleared outstanding dues of farmers relating to the last season and have started crushing at full capacity.

The ECC recommended the proposal of the Revenue Division for extension in the period of applicability of existing reduced withholding tax rate of 0.4 per cent for non-filers of income tax returns from 1st January 2017 to 31st March 2017.