Representatives of Pakistan Sugar Mills Association (PSMA) and sugar importers also participated in the meeting. Official sources told Business Recorder that private sector has been given a go ahead by the meeting to import 0.6 million tons of white or raw duty-free sugar to bridge the gap. Pakistan is facing shortage of about 1.3 million tons of sugar due to which prices have gone up across the country.
"If the private sector fails to perform well, the government will consider a deal on government to government basis," sources added. The meeting decided that the federal government will build up 0.7 million tons strategic reserves next year. However, no mechanism has been chalked out in the meeting. According to sources, the meeting decided that provincial government would be responsible for sugar availability from next year.
The meeting observed that sugar is lying in large quantity; the provinces can pick it as per their needs from the TCP stocks. The TCP has 336,299 tons of sugar stocks as on November 11, 2010 and another 993,361 tons of imported sugar will be added to the TCP stocks by November 30. Over and above this, the TCP will receive another 0.2 million tons by December 31 for which orders have been confirmed.
Apart from this, private sector has opened LC for import of 80,000 white sugar and 70,000 tons raw sugar. According to the decisions made in a meeting of Council of Common Interests last week to control escalating prices of sugar the provinces could directly buy sugar from TCP as per their needs directly. The meeting was apprised that the stocks available were around 0.4 million tons. The price of imported sugar in the market was Rs 75 per kg.
Condition of crops unaffected by floods was very good as it got the required quantity of water due to regular rains. It was decided that the sugar production in 2010-11 would be around 3.7 million tons. The crushing season was going to start from the 20th of November 2010 in full swing all over the country.
PSMA Chairman Javed Kayani lamented that despite the fact that the TCP has 336,299 tons stocks their last tender of 50,000 tons in five tranches of 10,000 each has failed to create any impact in the market. The reply of TCP Chairman was more of a lame excuse in this regard instead of being sorry for engineering a defective tender he was trying to give an indecent defence.
Chairman PSMA stressed the need to offload large quantities in order to defuse the pressure and said what is the use of this large surplus lying in the government's inventory while poor people are suffering in queues all over the country. Chairman PSMA also gave a detailed briefing on forecasts about production for the next crushing season.
According to surveys received from most of the mills yield and recovery is high compared to last year due to adequate rain fall and it is expected that the industry would end up producing about 3.7 to 3.8 million tons. Javed Kayani further said that there should be a review meeting in February 2011 to assess outcome of the crushing season. He however suggested that GOP must maintain a strategic reserve for market stabilisation and open market intervention. About the impression of hoarding, Chairman PSMA categorically stated that millers had already exhausted their stocks and now the pipeline is dry and according to market estimates a quantity of 20,000 tons is available.
He also impressed upon the committee to advise TCP to improve logistic support for delivery. Javed Kayani also said that situation would improve the moment crushing starts and prices would definitely come down for the good of consumers. He also assured the ministerial committee that crushing would be in full swing immediately after Eid-ul-Azha.
He said 11 sugar mills have already started crushing in Sindh and two in Punjab but there is harvesting of sugarcane, as growers are demanding high prices for sugarcane. He however hoped that situation would be amicably resolved with growers who are the backbone of this country.
The meeting decided that Punjab will lift 100,000 tons of TCP imported sugar, Sindh 34,000 tons, KPK 40,000 tons, Balochistan 16,000 tons, AJK/Northern Areas 4000 tons, Capital Territory Administration 6,000 tons immediately and off load it through the provincial mechanisms.
This would be in addition to the remaining 32,000 tons. TCP will continue with the already published tender notice. The USC was allowed 100,000 tons imported sugar for sale through mobile outlets and weekly bazaars in addition to increased supply from USC outlets.
The wholesale price of sugar has fallen by Rs 10 in the last three days because of the lifting of imported sugar by provinces as per CCI decision. The government would maintain 7 lakh tons worth of strategic reserves. It was stressed that the lifting should be done with maximum speed.
The meeting of the Ministerial Committee on Sugar was held on 11th November 2010. The meeting was chaired by Mir Hazar Khan Bijarani, Minister for Industries and Production and attended by Minister for Food and Agriculture, Secretary Minfa, Additional Secretary Industries and Production, Secretary Food KP, Additional Secretary Agriculture Sindh, Director Industries Punjab. Senior officers of Finance Division, Planning Commission, Commerce and representatives of the PSMA, Sugar importers and dealers.