Government decides to issue warning letter to PSMA

An inter-ministerial committee headed by Commerce Minister, Engineer Khurram Dastgir Khan on Wednesday decided to issue a warning letter to Pakistan Sugar Mills Association (PSMA) against continuous increase in sugar price in the domestic market without any justification, well informed sources told Business Recorder.
The decision was taken at the committee meeting presided over by Commerce Ministry and attended by Secretary Commerce, Azmat Ali Ranjha, Secretary Ministry of National Food Security and Research, Abid Javed and a representative of Ministry of Industries and Production (MoI&P) in addition to officials of Ministry of Commerce. On January 10 the Commerce Minister announced at a press conference that the government would withdraw sugar export permission in case sugar price manipulation was in evidence.
The sources said the committee checked sugar prices ever since the ECC allowed exports. The ECC allowed last month the export of 0.225 million tons to the mills without any freight subsidy till March 31, 2017.
The inter-ministerial committee, sources said, raised concern on a 3.2 per cent increase in sugar price and said that it should be brought under control. However, the committee did not suggest any strong measures in this regard but decided to write a "warning letter' to PSMA; and stated that further steps would be decided if nothing concrete is done by the Association in response to the committee's letter, the sources continued.
The sources said, the representative of Commerce Minister had already expressed concern at the increase in sugar prices at a meeting of Sugar Advisory Board (SAB). Subsequently, a similar situation was witnessed during the meeting of ECC presided over by the Finance Minister, Senator Ishaq Dar.
However, Pakistan Sugar Mills Association maintains that the price of sugar is determined by market forces not by mill owners. According to the Association, the expected sugar production during 2016-17 would be 5.5 million tons, if the carry forward stock of 1.2 million tons (as on September 30, 2016) was added to the production figures giving total availability of 6.7 million tons. Assuming the domestic consumption of 5 million tons during this year (up to September 2017), there would be a surplus of 1.7 million tons.