KARACHI: The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) has opposed fixation of sugar price by the federal government.
In a letter sent to Prime Minister Imran Khan and other federal ministers, FPCCI President Mian Naseer Hyatt Maggo has urged for free-float mechanism for sugar price.
The President FPCCI has drawn attention of the Prime Minister toward sugar price fixation issue and said that Ministry or Industries and Production is in the process or fixation of prices of sugar for the sugar industry in Punjab and Khyber Pakhtunkhwa.
He informed that government of Punjab and Khyber Pakhtunkhwa (KPK) had fixed a support price of sugarcane at Rs.200 per 40Kg, whereas, currently, sugarcane procurement rate has reached a level of about Rs 360 per 40Kg during the season.
He further informed that the average sale price of sugarcane is reported as Rs.282 per 40Kg for some mills, whereas average sugarcane price comes to Rs. 265 per 40 kg. Sugar industry has already reported the matter to Ministry of Industry, Government of Punjab and Government KPK, about the higher sugarcane prices being manipulated by middleman, however, the ministry took stance that sugarcane price of Rs.200 per 40 kg is the minimum price. Whereas, the actual market price of sugarcane had to be determined by the market forces.
Despite the complaints on sugar price, government of the Punjab has not taken action against middlemen involved in increase of sugarcane prices to an abnormal level detrimental to the interest of sugar industry and sugarcane growers.
President FPCCI said that now when the mills have purchased sugarcane at a very higher price and with some 42 percent additional payment overall Rs 285 billion has been paid as against Rs 200 billion in Punjab and Rs 22 billion against Rs 15 billion, 46 percent extra in KPK.
Now, the Ministry of Industry has started to determine the price of sugar unilaterally, without consulting the sugar Mills or stakeholders. “Such unilateral fixation of prices is inflicting heavy losses to sugar m ills, which may result into non-payment to the growers, government dues and bankruptcy of sugar mills,” he warned.
Nasser Maggo has requested the Prime Minister that prices of sugar be left to the business and marketing mechanism as it was left to the market factors in the case of sugarcane.
Despite all these factors, if still Federal government wants to fix the price or sugar, the task may be assigned to four independent Chartered Accountancy Firms instead of government functionaries, he proposed.
FPCCI has also suggested that Pakistan Sugar Mills Association must be taken on board for all such processes, otherwise it will have adverse effects on the sugar industry not only during current year, but next year and beyond.
Copyright Business Recorder, 2021