Economic Co-ordination Committee (ECC) of the Cabinet, in its meeting on March 19 presided over by the Prime Ministers Advisor on Finance Shaukat Tarin, regretted not allowing import of raw sugar at an appropriate time when it was cheaper than refined/white sugar, well-informed sources in the Industries Ministry told Business Recorder on Wednesday.
"Raw sugar should have been imported at an opportune time," the sources quoted Tarin as saying in the meeting.
On December 31, 2008, the Industries Ministry submitted a proposal to the ECC, proposing import of 0.4 million tons of raw sugar, but the summary, prepared by Industries and Production Secretary Shahab Khwaja, had outrightly been turned down.
Deputy Chairman of Planning Commission Sardar Assef Ahmad Ali and Privatisation Minister Naveed Qamar were the two main opponents of the proposal. Minister for Industries and Production Mian Manzoor Wattoo also refused to extend support to the Industries Secretary.
Sugar is being sold at Rs 47 per kilogram in retail market, but Pakistan Sugar Mills Association (PSMA) is projecting a price of Rs 60 per kilogram because of "free smuggling of sugar" and export of Gur to Afghanistan. The price of sugar in Afghanistan is Rs 60 per kilogram.
The sources revealed that the government had decided that average cost of local sugar production should be ascertained in comparison to international prices by the Commerce Ministry. "The objective of this exercise is to ensure that local sugar mills do not rake in excessive profits," they added.
The PSMA is of the view that Minfa and the Deputy Chairman of the Planning Commission are responsible for sugar crisis as both opposed raw sugar import. The Deputy Chairman of the Planning Commission had painted the PSMA as East India Company.
The sources said that the PSMA had given a presentation to the government in November 2008 in which it was feared that there would be a shortfall of 0.4 million tons of sugar during the current year. The association had recommended to the government to import 0.4 million tons of raw sugar through the Trading Corporation of Pakistan (TCP) and distribute it to the mills judiciously for processing, but the Minfa did not pay any heed to the proposal, said PSMA Chairman Iskandar Khan, while talking to this newspaper.
According to official documents, the ECC had been informed on March 19 that sugar stock available with the PSMA was over 2.533 million tons. There are reports that sugar shortfall would be around 0.6 million tons this year because of lower production of sugarcane and massive smuggling of sugar to Afghanistan.
The sources said that the Industries Secretary informed the government in December that during 2009, there would be a shortage of 550,000 tons to 770,000 tons sugar in the country, as the shortfall in sugarcane production would be about 8-10 percent.
The Industries Ministry submitted following proposals for consideration of the ECC:
-- Import of 400,000 tons of raw sugar at zero duty during 2008-09.
-- Only Pakistan Sugar Mills Association (PSMA), and not the private sector importers be allowed to import raw sugar.
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