ISLAMABAD: In a bid to avoid price variation/hike in the future, the federal and provincial governments of Sindh and Punjab are likely to purchase 0.50 million metric ton of sugar from sugar mills from February to June 2022.
According to sources, the government is all set to build strategic reserves of sugar to avoid import of sugar at expensive rates from the international market.
And, for this, the federal government will purchase 0.300 million metric ton (MMT) of sugar while provincial governments of Sindh/Punjab will purchase 0.200 MMT from the sugar mills in current crop year when the prices will be at low rates in the local market.
As per details, National Price Monitoring Committee (NPMC) in its meetings held on December 15, 2021 and 22nd December, 2021 directed the ministry of industries and production to build the strategic reserves of sugar to avoid price variation/hike in future by procurement from local producers at the most suitable rates.
The Sugar Advisory Board (SAB) meeting was conducted dated 29-12-2021 to review the sugar produced and estimation of sugar produced during this crushing year.
And, the Agriculture Policy Institute (API) under the Ministry of National Food Security and Research (MNFS&R) informed that due to bumper crop of sugarcane, it is anticipated that sugar around 7.04 Million Tons will be available during this crushing year i-e 2021-2022. This corroborated well with estimation of Cane Commissioners of the provinces, whose estimates hover around 6.353 million tons for this crushing year.
Keeping in view of uncertainty of consumption pattern of sugar, it was decided in the SAB meeting held on 29th December 2021 to take increased estimates of annual consumption of sugar from 5.80 million metric tons (as was determined in the SAB meeting held in December 2020) to 6.30 million tons for this crushing season).
It was also decided that reserve stocks of sugar may be maintained by the government by purchasing sugar in phased manner. From local sources instead of lifting the entire quantities in lumps sum and escalating the local prices. This will additionally help government to avoid import of sugar at expansive rates from the international markets, said sources.
As per the sources, it was proposed that upto 0.300 million metric ton sugar (which is for two months household consumption) should be purchased by the federal government whereas the provincial governments of Sindh/Punjab may be advised to purchase 0.200 million metric tons of sugar for strategic reserves from sugar mills in current bumper crop year.
Further this local purchase of sugar may be done when the prices are lower in the local market (i-e from February 2022 till June 2022). The purchase of sugar may be made in phased manner so as not to interfere with market forces. Further, this sugar should be purchased in following manner:
- Up to 0.150 million metric tons of (Granular sugar used by domestic consumer as per PSQCA standards) to be purchased by PASSCO and upto 0.150 million metric tons will be purchased by TCP.
- The sugar purchased from local sources by PASSCO and TCP will be kept in government warehouses of these organizations.
iii. The purchased/stored sugar will be released as per terms and conditions on the directions of federal cabinet’s economic coordination committee (ECC).
- The purchase of the upto 0.300 million metric tons of sugar will be financed by finance division and purchase of sugar will be done through standards procedure of commodity financing.
- Similar advisory may be issued to the Punjab and Sindh by Ministry of Industries and Production.
It is also learnt from sources that both National Food Security and Research and Commerce Division have been found reluctant to store sugar in the respective departments.
