Imported sugar to get costlier on surge in global prices

ISLAMABAD: A meeting of the Economic Coordination Committee (ECC) of the Cabinet was informed that imported sugar would cost approximately Rs104 per kg against the current retail market price of Rs98 per kg owing to an upward trend in sugar prices in the international market.

Sources said the ECC meeting presided over by Finance Minister Shaukat Tarin on June 28, 2021 allowed import of 100,000 metric tons of sugar after it was informed about the apprehensions that speculative pressure would start destabilising the domestic market much before the arrival of new sugar in the market. In a summary, the ministry stated that the estimated sugar stocks at the start of the crushing season 2021 would be very low and there is a serious apprehension that speculative pressure would start destabilising the domestic market much before the arrival of new sugar in the market.

In addition, the outlook for international sugar prices reflects an upward trend, the ministry added.

The ECC was also informed that the monthly consumption of sugar is around 0.485 million metric tons and the estimated sugar stocks at the beginning of the crushing season, mid November 2021, are estimated to be of around 0.200 million metric tons, which are too low to maintain price stability in the domestic market.

Therefore, the National Price Monitoring Committee (NPMC) meeting on 14.06.2021 directed the Ministry of Industries and Production to place a summary before the ECC for importing sugar amounting to 0.25 to 0.30 million metric tons to build up strategic reserves and minimise the role of speculative elements in the domestic market.

In compliance of the decision of the NPMC, a tender for the import of 100,000 metric tons was floated through the Trading Corporation of Pakistan (TCP).

However, the cost calculated by the TCP at port comes to Rs89.26/kg, which after transportation, packing and operational charges, would increase to approximately Rs104 per kg as against the current retail market price of Rs98 per kg.

Industries and Production Ministry also referred to the ECC the decision of February 20-01-2021, wherein, on its summary, it was decided that the TCP may be directed to import white sugar up to 500,000 metric tons if and when necessitated during the current season subject to demand as conveyed by the provinces, AJK, GB, ICT, and the Utility Stores Corporation through Industries and Production Division from time to time with the exemption of such imports of white sugar from all taxes and duties at import stage and its subsequent sale and exemption of rule 13 and 35 of Public Procurement Rules 2004 for such imports.

Copyright Business Recorder, 2021