ECC meeting chaired by Shamshad asks food ministry to help check smuggling, hoarding of sugar

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed the Ministry of National Food Security and Research (MNFS&R) to coordinate with all the relevant agencies and authorities to check smuggling and hoarding of sugar.

The ECC meeting presided over by the caretaker Finance Minister Dr Shamshad Akhtar, on Monday, reviewed previous ECC decision regarding export quota of sugar and after detailed discussion and deliberation decided that in light of the previous decision of the ECC on the matter, the ban on export of sugar was already in place post 10th of August 2023.

When contacted, an official said that 60 days limit allowed in export of sugar by the previous ECC meeting in June 2023 has expired on August 10, 2023 after which, there is an automatic ban export of sugar.

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The MNFS&R told the ECC that the government, on the request of the sugar industry, allowed export of 250,000 MT of sugar dated 11-01-2023 after the PSMA argued that during the crushing season 2022 industry produced the highest ever sugar of 08 MMT, and Pakistan will have two months of sugar beyond its needs when the next crushing season will start in November 2023 and bumper crop of sugarcane, will further add surplus production of sugar.

However, in the month of April 2023, the price of sugar, an essential food commodity, started increasing, despite the fact that the country had a carry-over stock of sugar at 0.99 MMT from the previous year (2021-22) and a bumper crop of sugarcane during the year 2022-23.

This continuous increase in price of the essential commodity compelled the MNFS&R to fix the price of sugar under the law. Taking notice of this increase in price, the Sugar Advisory Board (SAB) in its meeting held on 17th April 2023, after consultations with all the stakeholders approved fixation of price of sugar at Rs98.82 per kg.

Consequently, the MNFSR fixed the price of white crystalline sugar at Rs98.82 per kg in April 2023, under the provisions “Price Control and Prevention of Profiteering and Hoarding Act 1977” but the same is suspended by the Lahore High Court, Lahore and status quo is maintained in pursuance of court order, which is assailed in Lahore High Court, Lahore and Supreme Court of Pakistan.

The price of sugar is increasing continuously in the market, thus, causing stress to low-income consumers and increasing the food inflation.

The Federal Board of Revenue (FBR) has reported on 15th August 2023 that 2.27 MMT of sugar is left in stocks which would hardly meet the domestic consumption requirements till the start of next crushing season.

The provincial government of Sindh has increased the indicative price of sugarcane at Rs425 per 40kg enhancing the price by 41 per cent over the last year.

This will further induce pressure on the price of sugar, as the industry and the stockists will hoard the commodity for profiteering.

The total quota was distributed among the provinces on the basis of the ECC’s decision by the Ministry of Commerce. Sugar mills of Sindh assailed allocation of quota in the Sindh High Court, Sindh. The remaining export quota was to be utilised by the Sugar Mills of Sindh up to 12-08-2023 but apparently, sugar is exported after the date fixed by the court.

Therefore, it is suggested that the ECC may kindly review its decision made earlier regarding the export of sugar dated 11-01-2023 and cancel remaining quota already allocated to the sugar industry and impose complete ban on export of sugar in future.

The ECC further directed the MNFS&R to prepare and submit regular reports on availability of sugar stocks, consumption, and pricing to the ECC in order to enable it to monitor the availability and pricing of this important commodity.

In addition, the ECC also asked the MNFSR to provide the latest stock, availability and prices of wheat immediately.

Copyright Business Recorder, 2023