MoC agrees to support sugar export

MUSHTAQ GHUMMAN

ISLAMABAD: Ministry of Commerce (MoC) has reportedly agreed to support export of 225,000 tons of sugar on the recommendation of Sugar Advisory Board (SAB) by March 31, 2017 without any export rebate, well-informed sources told Business Recorder. Commerce Ministry, sources said, has prepared a summary for the Economic Co-ordination Committee (ECC) of the Cabinet in its forthcoming meeting.

Pakistan Sugar Mills Association (PSMA) in a letter to Commerce Minister had sought permission to export 0.5 million tons of sugar by March 31, 2017 without any subsidy. However, later on, the sugar industry argued that since the commodity's price has come down in the international market the government should consider a freight subsidy but the Commerce Ministry has not supported this proposal.

The Association in its letter appreciated the Commerce Minister for lending support to the industry by allowing export of sugar with a rebate during the last two years which had the following positive impact: (i) payments to sugarcane growers have been cleared; (ii) area under sugarcane cultivation remained intact as a result of payment to farmers; (iii) price of sugar remained stable in the country enabling the FBR to determine assessable value of sugar at Rs 60 per kg, resultantly more revenue for the government; and (iv) foreign exchange earnings of US $132 million.

According to the Association, with the commencement of crushing season 2016-17, it foresees a production of 5.5 million tons of sugar based on 70 million tons of sugarcane. With a carryover of 1.2 million tons as on September 30, 2016, the Association expects that the total available quantity will be 6.7 million tons and after defraying consumption of almost 5 million tons in 2016-17, surpluses will be almost 1.7 million tons as on September 30, 2017.

The Association has also given assurance to the government that permission for further export would be sought after crushing season upon review of production figures. Commerce Minister confirmed to Business Recorder that a summary on sugar export exists but refused to give exact quantity that would be allowed for export. An official on condition anonymity told Business Recorder that the Ministry has shown its willingness to support export of sugar after very careful consultation process.

In reply to a question the official said the Commerce Ministry had set the condition that summary will be sent subsequent to seeking the viewpoint of Sugar Advisory Board which has been implemented, adding that the Commerce Ministry does not want domestic shortage of sugar or increase in prices. On the issue of subsidy, the official stated there is no justification for subsidising sugar exports as international prices have recovered.