In case the sugar stocks available with the mills are not consumed, sugarcane crushing season 2011-12 is likely to be delayed till December, resulting in major problems for the growers.
The current sugar situation was not discussed by the Economic Co-ordination Committee (ECC) of the cabinet in its meeting on October 13, 2011, and the delayed crushing scenario or woes of growers also did not come under discussion.
However, when contacted, Rabia Sultan, one of the top sugarcane growers, told Business Recorder that any delay in the crushing season would mean financial loss to the growers. She argued against delay in the crushing season because it would reduce the weight of cane.
On the other hand, mill owners maintain that their sugar is pledged with the State Bank of Pakistan (SBP) and until they clear their previous loans they would not be able to get fresh loan.
According to official documents obtained from the Ministry of Industries, the ECC in its meeting on July 20, 2011 had decided that the Ministry of Industries would submit firmed up position of sugar in September/October 2011 for consideration of the ECC. Consequently, the Ministry of Industries carried out an exercise in this regard.
It was intimated that average consumption during last three years had remained at 21.5 kg per head. However, sugar consumption during 2011-12 was estimated at 25 kg per head. Keeping in view the estimated sugar production, as forecast by Suparco, it was estimated that there would be a gap of 0.4 million tons, without taking into account the effect of rains and subsequent floods damaging the sugarcane crop in Sindh.
If the losses of sugarcane crop are taken into account, the gap would be 0.7 million tons. It was intimated that the ECC in its meeting on September 21 had decided that there would be no role of TCP in import of sugar. The Ministry of Industries, therefore, sought approval of the ECC for allowing import of 0.7 million tons of sugar through Utility Stores Corporation (USC) for maintaining stability in the market, ensuring sugar availability and affordability and catering for interventions through USC in 2012.
During the ensuing discussion, concerns were expressed on the estimation of sugar production and its average per head consumption. It was stated that no basis had been given for working out average consumption of sugar. On a query, the ECC was informed that during 2010, 1.1 million tons of sugar was imported. It was also observed that the proposal was premature as the crushing season had not yet started. The ECC, however, appreciated that the matter was brought to its notice well in time.
It was explained that under the Rules of Business 1973, as amended in pursuance of the 18th Constitutional amendment, import of sugar was the exclusive domain of the Ministry of Commerce.
On behalf of the Ministry of Commerce, imports of all commodities in the public sector are carried out by the TCP and the USC cannot import sugar. It was suggested that the proposal may be re-submitted for consideration of the ECC after completion of crushing season when firmed up estimates of sugar production would be available.
However, a ministerial committee has been constituted to assess the actual requirement of sugar for 2011-12 and to make recommendations for its import. The committee would also determine which entity would be allowed to import sugar, keeping in view the Rules of Business 1973.