Sugar supply of 4.7mn T surpasses demand

ISLAMABAD: The sugar supply of 4.7 million tons surpassed demand of 4.3 million tons in 2010-11 season.

"Sufficient stocks of sugar are available in the country and there is no shortage of sugar" said a statement issued by the Ministry of Industries and Production here on Friday.

It added that presently sugar stocks stand at 2.012 Million Tons, which are sufficient till December 25, 2011 on consumption pattern of 350,000 tons/month.

Highlighting the break-up , the statement said that during the Sugar season of 2010-11: Domestic sugar production was 41,68,723 tons, Leftover Stocks stood at 19,575 tons, Stocks of sugar with TCP were 4,00,000 tons and the Sugar imported by private sector were 1,38,000 tons.

The total stock of the sugar during the season stood at 47,26,298 tons, the statement said.

In 2010 calendar year the monthly off-take of sugar was particularly low.

The total off -take in 2009-10 was 37,86,556 tons or in one month 3,15, 546 tons of sugar was consumed.

Average sugar consumption/off take is estimated at 350,000 Tons per month or 43,00000 tons. Consumption is calculated on the basis of last 12 months average off-take. It shows that sugar demand is `price elastic'. If the price is high less sugar is consumed.

The statement further said that as regards sugar price being raised on the plea of `Federal Excise Duty' the factual position is that White Sugar was allowed two concessions till March 2011.

Firstly the assessed sugar price per kg was fixed at Rs28.88/kg. Secondly sales tax levied was 8pc of this fixed assessable value.

In March 2011 the assessable value was taken as the `market value' while the sales tax was still levied at 8pc or approx. half the sales tax levied on other items. Now, Sugar has now been exempted from sales tax through Financial Act 2011 and ONLY 8pc Federal Excise duty has been imposed.

Moreover 2.5pc Special Excise Duty (SED) has also been abolished as for all other items.

As such if ex-mill price is taken as Rs60/kg then the 8pc FED will be Rs4.80/kg.

"The increase in sugar price is totally unjustified as the sugar mills have already increased the ex-mill price to the tune of Rs6.30/kg (Sales tax 8pc and Central Excise Duty @ 2.5pc) since March 2011", the statement said.

It further elaborated that sufficient stocks of sugar are available in the country and there is no shortage of sugar.

It said that the Interior Ministry and concerned provincial departments, have been requested to control any smuggling or hoarding in their jurisdictions.

"The sugar sale is continuing at Rs55/kg from USC outlets for lower income groups", the statement said.

Copyright APP (Associated Press of Pakistan), 2011