ISLAMABAD: As the powerful sugar millers are pressing the government to allow export of surplus sugar, the government is going to negotiate with the millers on Monday (today).
As per the sources, the representatives of Pakistan Sugar Mills Association (PSMA) are scheduled to hold a meeting with Finance Minister Ishaq Dar to convince the government about export of limited sugar stock, which the association claims to be surplus in the country.
The association had earlier warned the government that the sugarcane crushing season will not start until the export of one million tonnes of sugar is allowed.
Addressing a press conference on Friday Asim Ghani Usman, Central Chairman of PSMA had claimed that it was necessary to start the crushing season by November 30, but sugar mills already had surplus stocks from the last season, amounting to more than one million tonnes, which was enough to meet the national sugar requirements till January 15.
“If we are not allowed to export 10 lakh tons of sugar, we don’t have a storage capacity and thus the crushing of new cane is not possible.”
At present 1.2 to 1.3 million tons of sugar is available in godowns, which is sufficient to meet the national domestic requirement till January 15, 2023.
“If the government insists not to permit the export then let the crushing season start from mid-January. If the government does not believe in the figures presented by the millers or the cost of sugar production then it may appoint an independent foreign auditor to let the issue settle for once and all,” Ghani said.
According to him, if the government, due to political consideration, wanted to keep some buffer stocks then it could retain 500,000 tons of sugar and allow the rest of the surplus to be exported.
According to Iskander M. Khan Sr. Vice Chairman PSMA, the government should have allowed export even in June of this year. “We could have earned $1.2 billion from export. If one million tonnes of sugar was exported, everyone would benefit, the government should immediately pay attention to the situation. If this situation continued, the sugar industry might go bankrupt. If the industry suffers, farmers would also be affected,” he said.
Since there is a competitive market in various countries Pakistan can easily export the surplus sugar without any financing and support to the sugar industry, he claimed.
Last year the Sugar Sector Reform Committee had made a draft proposal for deregulating the sugar industry under which various amendments in rules and a number of steps were proposed.
While proposing amendments in Sugar Factories Control Act 1950 it was proposed that there will be no ban on import of sugar. For exporting the commodity, stocks of sugar will be monitored for any decision of export. Exports will be considered only if there is an excess amount of 1.5MT over the domestic consumption requirement. Unlike the government’s previous decision to subsidize sugar exports, the committee proposes that the government will not provide any export subsidy.
Likewise through the proposed deregulation, the government had tried to bind millers for crushing sugarcane within the timelines. In this regard, through amendments in Factories Control Act 1950, the provincial government would fix a crushing date and millers would be penalized in case they fail to comply. The penalties of Rs5 million and 12 months imprisonment were also proposed for those violating the timeline.
