ISLAMABAD: The government has conditionally allowed the Pakistan Sugar Mills Association (PSMA) to export 150,000 metric tons of sugar and has directed it to maintain local stocks to ensure a smooth supply of the commodity in local markets at a sustainable price.
The decision to this effect was taken in the meeting of the Sugar Advisory Board (SAB) which met here with Minister of Industry and Production Rana Tanveer Hussain in the chair.
The meeting was also attended by the federal secretary for industries and production and other stakeholders including PSMA, Kissan Ittehad along with other relevant federal and provincial representatives.
PSMA seeks permission to export ‘expensively produced’ sugar
In this regard, an agreement was signed between the government and the PSMA. The initial proposal allows for the export of 150,000 metric tonnes of sugar, which is only 30 percent of the volume of 500,000 tons sought by the PSMA.
Officials from the federal food department reported that this decision comes in light of the PSMA’s request to the Ministers of Finance and Commerce, advocating for higher exports based on the surplus sugar production this year.
A summary of the sugar export decision would be presented in a meeting of the Economic Coordination Committee (ECC) of the cabinet. The officials vowed that the ex-mill rate of sugar would not be allowed to go above Rs140 per kg while in retail, sugar is being sold in the range of Rs145-160 per kg in different parts of the country, which last year when the government allowed the exports of sugar jumped to Rs180-200 per kg. The sugar prices came down following the arrival of new produce in the market in December 2023. There will be an agreement between the government and PSMA that the decision to export more sugar would be based on the prices of sugar in the market. The price of sugar in the market will not be allowed to increase, sources added. The sugar industry while pleading the government to allow sugar export has stated that the step will help bring billions of dollars in the country with an exportable surplus of sugar.
The PSMA is making all possible efforts to convince the government to allow the industry to export 1.5 million tons of sugar. The sugar industry officials told this correspondent that PSMA in first phase was trying to get permission of exporting half a million tons of the commodity.
Three past meetings of the Sugar Advisory Board have failed to reach any consensus among stakeholders. According to official figures released by the government finalised by the Ministry of National Food Security in collaboration with the Federal Board of Revenue (FBR) and cane commissioners, at present, Pakistan has around 1.15 million tons of surplus stocks of sugar contrary to the PSMA’s claim of 1.6 million tons.
However, the PSMA claims that the Food Ministry was factoring in the impact of smuggling into its strategic reserves and consumption requirements, which is tantamount to legalising the menace, therefore, in official figures, it has shown almost half a million less stock of the commodity.
However, Pakistani authorities have been struggling to completely disrupt smuggling due to porous borders and specific requirements and employment opportunities in the province of Balochistan.
The industry claims its production cost was Rs175 per kg, as it bought sugarcane in the range of Rs450 to Rs500 per 40 kg, higher than the maximum support price of Rs425.
Copyright Business Recorder, 2024
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