Meanwhile, the PSMA has written a letter to Commerce Minister Pervaiz Malik, in which the association has expressed gratitude for allowing it to export 1.5 million tons and purchase of 300,000 tons of sugar through Trading Corporation of Pakistan (TCP) to facilitate payments to growers. There remains a major impediment restricting exports in the notification of December 7, 2017, ie "the start of cane crushing latest by 30th November 2017 and continuation thereafter."
However, the mills could not start crushing on November 30. Most of the mills in the province of Punjab were able to commence crushing on November 30, 2017 but could not continue due to appalling weather conditions, slow and intermittent supply of sugarcane in the beginning days; resultantly, cane commissioners of the respective provinces are reluctant to certify to the effect of "continuation". However, the process of start-up as per Cane Act 1950 was duly complied with. The association requested for deleting the said cited clause.
"We have submitted sugar cost break-up in the Sugar Advisory Board (SAB) meetings and various other forums which works out to Rs 63 per kg with taxes based on sugarcane support price of Rs 180/182 per 40kg. Ministry of Commerce has adopted a domestic price level of Rs 54.87 per kg for discontinuation of exports which is highly unreasonable. We strongly suggest that it should be revised to read as Rs 65 per kg," said secretary general PSMA in the letter.
According to the association, the PSMA called on Prime Minister and requested for TCP intervention to off-load further stocks of 1.5 million tons and he approved the mechanism but the Ministry of Commerce while making modalities for procurement has recommended a 70% payment on taking over the physical stocks by TCP Muqadam, an additional 10% payment to be made subject to confirmation by the respective provincial cane commissioners that the dues of sugarcane growers have been cleared and the remaining 20% payment to be made on lifting of sugar from the mills premises. The purpose of the entire exercise is to facilitate payments to sugarcane growers which is not possible under the proposed arrangement. The mode of payment should be 100% advance.
"We suggest that a bank guarantee must be furnished against advance favoring TCP which should be mandatory for the seller to safeguard the interest of government and avoid any unscrupulous activity," he continued. The association has requested the federal government to review the modalities to facilitate payments to sugarcane grower which is a very sensitive issue, especially during an election year.