He said this while talking to a delegation of Pakistan Sugar Mills Association (PSMA) led its Chairman Javed Kayani. Secretary Commerce was briefed about final production figures of sugar and his support sought for further export to facilitate payments to the growers who are in dire straits due to an unprecedented sugarcane crop and the resultant produce of 6.986 million tons in 2016-17 season of which Punjab's output is 4.271 million tons, Sindh's 2.250 million tons and KPK's 0.465 million tons. Besides this, beet sugar of 25-30,000 tons will also be added and the total figure will exceed 7 million tons.
The newly-appointed Secretary Commerce was informed that in the first meeting sugar industry sought permission to export 0.5 million tons and SAB recommended 0.3 million tons while Commerce Ministry curtailed the quantity to 0.225 million tons. In the second meeting PSMA again took up the matter for further export in March in view of the looming surplus and presented detailed figures to SAB. After due diligence and with the consent of all the board members, SAB recommended 0.4 million tons for export but the inter-ministerial committee headed by Commerce Minister Engineer Khurram Dastgir Khan again reduced the quantity to 0.2 million tons which has actually not helped the industry and the growers as neither the mills are able to sell the surplus produce in Pakistan and nor are the payments to growers being made and the situation is very alarming.
According to sources, Secretary Commerce proposed export of sugar through traders on which sugar industry responded that permission to export sugar is contingent upon clearance of growers dues as price of sugarcane is determined by the provincial governments and the sugar industry is obliged to crush the entire quantity of sugarcane. Therefore, export mechanism of sugar is only to facilitate the payments to the grower to whom the industry is obliged to make timely payments for their produce.
The Association also gave its forecast for the next year and maintained that there would be an increase of at least 10% in sugar production to around 7.7 million tons therefore it is necessary to export the entire surplus before the start of next crushing season.
To a point raised by the Secretary Commerce that price of sugar increases in domestic market with exports it was explained to him that sugarcane at Rs 180 per 40kg and at fixed assessable value of Rs 60 for purposes of sales tax the average industry breaks even at a price of not less than Rs 64/kg adding that the sugar industry is justified to make a reasonable profit for its shareholders.
Secretary Commerce concluded by saying that figures should now be presented through Sugar Advisory Board and then the Ministry will refer the matter to ECC for export. However, Secretary was informed that after accounting for domestic consumption of 5.1 million tons at 425,000 tons per month and the existing permission to export 425,000 tons there is still a surplus of 1.475 million tons which must be allowed so that the industry does not have a carry-over for the next season which again is expected to be a bumper crop.
Copyright Business Recorder, 2017