The government and Pakistan Sugar Mills Association (PSMA) have stiffened their stances ahead of a crucial meeting today (Wednesday) to explore ways and means to resolve the deadlock after the Lahore High Court decision of selling sugar at Rs 40 per kg in the open market.
Minister for Industries and Production Manzoor Ahmed Wattoo informed the Senate Standing Committee on Agriculture that Prime Minister Syed Yousuf Raza Gilani has convened a meeting of Chief Ministers on Wednesday to discuss how to address the situation.
The Chairman of PSMA, Iskandar Khan told the meeting in categorical terms on Tuesday that the LHC decision to sell sugar at Rs 40 could not be implemented as the cost of sugar mills was much higher. Minister for Industries and Agriculture Manzoor Ahmed Wattoo and Nazar Muhammad Gondal, as well as the committee implored the PSMA to honour the court decision saying that even the Prime Minister was helpless against the court ruling and they have abide by it.
Wattoo said that price increase in local market was unjustified in the wake of increase in the international market as PSMA had bought sugarcane from the growers at much lower price. The members were of the view that even the impact of 50 percent GST waiver by the government to sugar mills was not passed on to the consumers.
The members also held the government responsible for increase in price of sugar saying that it was the responsibility of the government to regularly monitor the price to protect consumers from the cartels. The Minister for Industries contested that price monitoring was in the jurisdiction of the provincial governments who had the executive powers to enforce it and not the federal government.
He said his ministry's role was limited to only Sugar Advisory Board whereas the agriculture minister said that his ministry's role was confined to policy issues and assessment of crop yield and they have apprised the provincial governments timely about the production estimates of sugar.
He said that when this crisis started mainly because of increase in sugar prices in the international market the country had more than 1.2 million tons in godowns of Trading Corporation of Pakistan and sugar mills.
The TCP Chairman briefed the meeting about the steps taken in light of the Economic Co-ordination Committee directives to ensure sufficient buffer stock to ensure supply. The TCP and the Ministry of Industries and Production asserted that there was no shortage of sugar in the country and this crisis was beyond comprehension. The PSMA Chairman alleged that the government did not act despite repeated warnings that sugar was being smuggled to Afghanistan.
He said it would be totally unfair to expect from sugar mills to sell sugar at the price below the production cost. Iskandar said that the LHC crossed its mandate by taking suo motu notice against sugar mills because it was only the jurisdiction of the apex court to take suo motu notice. The court, he said, did not take their view before giving its ruling, which was unfair. He did not commit that sugar would be sold at the price determined by the LHC.
The meeting remained inconclusive ahead of the special meeting on the issue to be chaired by the Prime Minister, however, the Industries Minister apprised the committee about number of steps being taken to avoid such a situation in the future. These included keeping 0.5 million tons sugar as buffer stock, to ensure crushing till November 15, to fix the sugarcane price with sucrose level and allow import of raw sugar but only after the beginning of crushing to protect growers.