LAHORE: Pakistan Sugar Mills Association (PSMA) non-distillery members have urged the federal commerce ministry to immediately withdraw 15 percent regulatory duty imposed on export of molasses.
These mills also sought an immediate meeting of the ministry with the stakeholders to devise a future line of action for a fair treatment of non-distillery sugar mills and the ethanol production distilleries installed in the country.
In a letter to the ministry, the PSMA said that certain sugar mills by way of heavy capital investments installed ethanol production distilleries. The members of this distinct group represented by PEMA, desire to procure and consume inexpensive sugarcane molasses as basic raw material for conversion into Ethanol, export the same and earn substantial profits.
However, majority of sugar mills lack such an infrastructure. They thus, directly export the molasses to fetch valuable income in foreign exchange which augments and supports their sugar production operations and sugarcane payments.
After 2009 PEMA got imposed Regulatory Duty on export of molasses to procure subsidized sugarcane molasses which is basic raw material for manufacturing and export of Ethanol. In recent years, ethanol production and export by PEMA members has shown a healthy increase.
These producers ostensibly have a growing appetite for inexpensive locally produced sugarcane molasses. It was under their influence that regulatory duty on export of sugarcane molasses was initially imposed at rate of 10% which was then increased to 15%. Now, once again, there is a move by these units to seek either a total ban or increase in regulatory duty to an astounding rate of 50%.
The entire objective of these PEMA members is to procure sugarcane molasses at cheaper rates within Pakistan so as to facilitate their ethanol production and export. The stated objective sought to be achieved is in utter negation to free and fair competition for such sugar mills who do not have these distilleries and merely export sugarcane molasses.
One dimension of this move is a recent Representation made before the Ministry of Commerce and Industry by PEMA. This has culminated in proceedings before the National Tariff Commission, Government of Pakistan, which is now deliberating on the suggestions of PEMA.
Non-Distillery Sugar Mills/Members of Pakistan Sugar Mills Association-Punjab Zone (29 out of 41) held an extensive meeting on 29.02.2024. Therein, they expressed their dismay and anxiety on the issue as Molasses is a major bi-product of the sugar industry and its annual production is almost half of total quantity of sugar produced in the country.
Export of Molasses had been a source of cash generation for the mills for timely payment to its growers while its local consumption used to be only 5% of its total production and remaining 95% was directly or indirectly exported by sugar mills.
The letter added that analysis of the export data finds that quantity of Molasses exported has considerably decreased after imposition of Regulatory Duty in 2009 and at its maximum was not more than 10 percent of molasses produced in the country. Molasses export serves as a good parameter to determine local prices of molasses consumed internally by the distilleries.
Copyright Business Recorder, 2024