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Pakistan Sugar Mills Association (PSMA) on Monday said that certain millers in connivance with the authorities concerned, smuggled 850,000 tons of locally manufactured white refined sugar worth Rs 42.5 million to Afghanistan for creating a reason for the import of costly sugar from the international market.
Smuggling of white refined sugar started from the beginning of the crushing season 2008-09 and reached its peak during the ongoing crackdown on sugar mills. The millers, some of them holding key positions in the government, have started smuggling of the commodity for creating reason for sugar import at higher rates, sources at PSMA told Business Recorder on Monday.
The sources said during crushing season, these millers smuggled refined sugar to Afghanistan through Quetta and Chaman, but now they have started regular illegal export as the government has refused to pay exorbitant ex-mill price. The government, instead of blocking illegal export, has started crackdown on the millers who refuse to export their stocks for supporting sugar industry, they added.
The sources disclosed that initially 400,000 tons of white refined sugar was smuggled to the neighbouring countries but as the government kicked off operation against hoarders, some millers have smuggled 450,000 tons sugar to protect their investment. The price of white refined sugar in Afghanistan is Rs 110/kg and India Rs 59/kg, which is considered as the world largest sugar producing countries, they added.
Talking to Business Recorder, PSMA Chairman Iskandar Khan said the association had written letters to Prime Minister Syed Yousuf Raza Gillani, the Minfa, the Ministry of Industries and Production and the Economic Co-ordination Committee (ECC), informing them about the illegal export of white refined sugar in the guise of raw sugar, but no action has been taken against the millers involved in the practice.
Iskandar said the millers had asked the government to purchase 1.3 million tons of sugar with ex-mill rate of Rs 45/kg instead of importing it, which cost the consumers Rs 65/kg, but the government rejected the offer, Iskandar added.
The chairman argued that it is not possible for the sugar mill owners to sell refined sugar with ex-mill rate of Rs 36/kg while the manufacturing cost of one kilogramme white refined sugar stands at Rs 35/kg. "The price of one kilogramme processed sugar is Rs 38/kg and the millers paid Rs 2.31/kg GST and 45 paisa FED to the government, so how it is possible to reduce the ex-mill price of sugar," the chairman added.

Copyright Business Recorder, 2009

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