Economic Coordination Committee (ECC) of the Cabinet has reportedly been misled by the sugar sector players through the Ministry of Industries and Production (MoI&P), which overstated 306 per cent higher stock figures, well informed sources told Business Recorder. MoI&P in its summary to the ECC prepared on October 28, 2013 claimed that domestic sugar mills have a stock of 1,828,613 MT which is sufficient till March 15, 2014 at the consumption rate of 390,000 MT per month whereas new sugar will start arriving in the first week of December for 2013-14 season.
On the basis of highly exaggerated stock figures, MOI&P recommended to the ECC that TCP requires 150,000 MT sugar for allocation to USC against its quota for January/February, 2014 and to meet the requirements of Pakistan Army, Navy and CSD as well. However, insiders have challenged MoI&P's claim of 1,828,613 MT stock and revealed that presently sugar stock is not more than 450,000 MT as of November 1, 2013 which is sufficient till first of December. Insiders also claim that stock with Punjab stood at 200,000 MT, followed by 1 75,000 MT in Sindh and 25000 MT in Khyber Pakhtunkhawa (KPK). Keeping in view the existing consumption pattern and Ashura, the stocks are only for November. This implies that the claim of carryover figure of stock of 150,000 MT with the mills is fabricated.
In the recent past, ex-mill price was Rs 48 or 49 per kilogram, which has increased up to Rs 58 or Rs 59 per kg, retail price of which is Rs 62 or 63 per kg. "MoI&P has submitted incorrect stocks' statistics to the ECC on November 6, 2013 by replacing first summary with another just to give benefit to the sugar mill owners," claimed an insider on condition of anonymity.
The sources said, based on the sugar stocks' figures presented by the MoI&P, the ECC, in its meeting on November 6, 2013 personally heard the representatives of sugar mills. After hearing, the ECC fixed the crushing date of November 20, 2013 for Sindh and November 25, 2013 for Punjab despite the fact that the MoI&P and Commerce ministry opposed extension in crushing season deadlines. It is also interesting to note that PSMA's representative who argued in the ECC meeting, in favour of extension in crushing date, wrote a letter to the PSO to Finance Minister and challenged the authority of the ECC with regard to fixation of crushing date.
"Start of crushing season falls under the Sugar Factory Control Act, which is a provincial subject. The dates for the start of crushing seasons are already mentioned in the in the Sugar Factory Control Act under the Cane Commissioner of the Provincial Government," said, PSMA Secretary General in a letter, annexed with the summary of the Commerce Ministry.
This correspondent sent messages to get the viewpoints of Finance Minister, Ishaq Dar, Secretary Industries, Shafqat Naghmi and President PSMA, Punjab Riaz Qadeer Butt; however, none of them respond. A highly informed source told this scribe on Monday that Commerce Ministry prepared the summary for extension in crushing season date on a telephone call of Finance Minister, Ishaq Dar to Commerce Secretary Qasim Niaz. Minister of State for Commerce, Khurram Dastgir was not in picture. Analysts are of the view that sugar procurement plan and fixation of crushing date of millers' choice will lead to massive increase in sugar prices in the days to come.