Chairman Pakistan Sugar Mills Association (PSMA) Javed Kayani has urged government to consider PSMA proposal of barter trade for procurement of urea against sugar.
In a letter to Federal Finance Minister Abdul Hafeez Shaikh, PSMA Chairman said that the government has approved import of 300,000 tons urea in ECC to meet the requirements of the country for the Kharif season, which can actually be procured from Iran against barter of sugar, which will save precious foreign exchange. At present the international price of sugar can almost buy double quantity of urea. Therefore, taking advantage of the situation the government can procure 700,000 to 800,000 tons of urea, Kayani said.
PSMA in a recently held Sugar Advisory Board meeting on 12th March made a very strong recommendation to buy a further quantity of 400,000 tons in view of the current inventory of sugar. Unfortunately, the process of purchase through Trading Corporation of Pakistan (TCP) has not been initiated as yet, which is grossly impacting payments of sugarcane growers as well.
"We are facing tremendous pressure of the growers and the respective provincial governments to clear payments of sugarcane growers for the current season, which are likely to be delayed for want of disposal of surplus stocks," he feared. PSMA Chairman suggested that the government should adopt a pragmatic approach in view of the submissions made not only to procure urea against barter trade of sugar but also to facilitate payments to sugarcane growers and avert bank defaults on principal and mark up.
"We hereby confirm that 400,000 tons of sugar is ready and available for Government of Pakistan as and when required," Kayani offered in the letter. Kayani in a statement issued on Friday also said without the provision of drawing 90 percent credit instead of existing rate of 70 percent against pledge of sugar stocks, discharging entire liabilities of growers is not possible. "We are not demanding any extra facility instead we want 30 percent margin be reduced. It will facilitate both growers and the industry and pressure on the government will also be reduced. Therefore, the government should direct banks to reduce margin," he concluded.