A powerful lobby within the Cabinet, directly linked with sugar business, is a major hurdle in the offloading of Trading Corporation of Pakistan (TCP) buffer stock.
The lobby, enjoying support of at least two federal ministers is instrumental in pushing up the prices to ensure that mill-owners, whose a good number is from their own families, get high prices for their stocks.
The lobby is so strong, and effective, that it blocked the Advisor to Prime Minister on Finance, Dr Salman Shah's bid for release of TCP sugar stock twice.
The story goes back to September this year when, on the direction of Prime Minister, Dr Salman directed the TCP to offload the stock ahead of Ramazan. The motive was to catch the upward trend in sugar prices and ensure its supply to the consumers. But, it did not work, and the millers made money by selling stocks at irrationally higher rates.
Market sources said that major beneficiaries were two mills of federal ministers, as their units had big unsold stocks.
One of the minister played key role in blocking the move in September. He categorically refused to implement the Advisor's decision, and referred the case to the Prime Minister with the proposal that the issue be decided at ECC level. This was actually a move to tactfully delay the release of TCP stock. He, by blocking the move, reminded the advisor that he was not the right authority to take decision like buffer stock sugar release.
Salman's direction has again met the same fate, after three months. The same powerful minister has managed to block the move. He has exactly the same reason for not following the direction.
Sources said the advisor passed on the direction to Secretary, Commerce, after a meeting last week for early release of TCP stock, but to no use.
The mill owners are fully aware that the day TCP released the stock, sugar prices would go down considerably and their profit margin would shrink.
The question arises: to what extent the ministers, who are supposed to protect the consumers, can go to protect their own and other mill owners' interest? And, is the Prime Minister not aware of what is going on in the sugar market, after abrupt closure of the mills?
Since it's an issue of everybody's interest, the government should have taken serious notice of the mills closure and subsequent rise in sugar prices, and should have come up to protect the consumers. It should have realised much earlier that this time situation is very grim due to sudden closure of the mills, and high sugar prices would hurt the poor more than anything else.