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The Federal government is unlikely to extend Rs 13 per kg cash support on export to Sindh- based sugar mills which are paying Rs 172 per 40 kg to growers instead of Rs 180 per 40 kg as was announced by the federal government, well informed sources told Business Recorder. The ECC, in its meeting on December 7, 2015, had approved the export of 0.5 million tons of sugar with Rs 13 per kg as cash support due to low prices of sugar in the international market.
However, a committee headed by Commerce Minister, Engineer Khurram Dastgir Khan, on Thursday reviewed the status of exports and noted that sugar mills have not yet exported sugar since the decision of the ECC. The inter-ministerial committee is mandated to review sugar stocks every month in the light of sugar export decision and submit a report to the ECC.
The committee noted that wholesale prices of sugar have increased by Rs 4.50 (from Rs 50.50 to Rs 55) per kg after the decision of December 7, 2015 despite the fact that the mills did not export the commodity. The committee also noted that the price of sugar has increased from $403 per MT to $419 per MT.
On December 31, 2015, the ECC was informed that the Chairman, ECC while chairing the meeting on December 18, 2015 had directed the Cabinet Division to ascertain factual position about the issue pertaining to delay in notifying the official price of sugarcane by the Government of Sindh, from Ministry of National Food Security and Research.
The ECC observed that the purpose of the cash support/subsidy to sugar exporters was to facilitate/ensure timely payment of the outstanding dues of sugarcane growers. The ECC directed Ministries of Commerce and National Food Security and Research to ensure that sugar exporters must utilise cash support for the purpose for which it was granted and to get notified the official price @ Rs 180 per 40 kg of sugar in Sindh. Otherwise, it would not be possible for the Federal Government to provide the subsidy to the sugar mills/exporters.
After a detailed discussion, the ECC noted the position of sugarcane price in Sindh presented by the Cabinet Division and directed the Ministries of Commerce and National Food Security and Research to ensure that notifications for the agreed price of Rs 180 per 40 kg are issued by the provincial governments concerned. The committee emphasised that the cash support being provided by the Federal Government was subject to payment of the due price of Rs 180 per 40 kg to the farmers and directed the Ministries concerned to resolve any outstanding issues and report back to ECC in the next meeting in case any issues remain unresolved.
However, Dastgir-led committee on Thursday observed that the federal government cannot force any provincial government to notify universal price. This implies that those provinces which have not notified sugarcane price of Rs 180 per 40 kg will not be eligible for export subsidy.

Copyright Business Recorder, 2016

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