Refined sugar import: MoF asked to arrange Rs18bn

ISLAMABAD: Finance Minister Shaukat Tarin has directed Ministry of Finance to arrange funds of Rs 18 billion for import of refined sugar of 0.2 million tons, well-informed sources told Business Recorder.

On July 16, 2021, the Economic Coordination Committee (ECC) of the Cabinet was briefed about the case as stated in the summary by the Ministry of Industries and Production.

The MoI&P sought approval of the ECC for the following proposals: (i) Trading Corporation of Pakistan (TCP) may be allowed to import 200,000 metric tons of sugar for strategic reserves out of already approved imports of 500,000 metric tons with all applicable Public Procurement Regulatory Authority (PPRA) exemptions; (ii) Utility Stores Corporation (USC) to purchase of sugar from TCP to hold strategic reserves either at its TCP godowns or if required at private warehouses (which will be selected following PPRA rules and doing cost comparison with TCP warehouse facility). Sugar would arrive in a consignment of 25,000-50,000 metric tons with time lag of 7-15 days in between consignments hence storage needs may actually be less than anticipated at this time; (iii) allocation of Rs 18 billion for import and storage of sugar for 3 months approximately (calculated on the basis of landed cost of the last tender floated by TCP) and warehousing cost by TCP; and (iv) Finance Division to arrange forex of US$ 110 million for the import of 200,000 metric tons of sugar.

During the ensuing discussion, the Ministry of Industries and Production informed the ECC that comments of the relevant stakeholders could not be solicited due to paucity of time. However, the matter being of urgent nature, the comments may be invited during the meeting. Ministry of National Food Security and Research did not raise any objection. Finance Division conveyed its concurrence to the proposal in the meeting. It was observed by the ECC that representation of the Commerce Division was not there. However, due to importance of the issue, the Chairman ECC observed that maintenance of strategic reserves of sugar was of extreme importance as sugar is a basic necessity of the common man. Moreover, this measure will lead to price stabilization and avoid possible shortages in the country.

After detailed deliberations, the ECC approved the proposal with the modification that the Finance Division shall provide the amount required for the import of 200,000 metric tons of sugar through a supplementary grant or through some other financial arrangement. The Ministry of Industries and Production may consult Finance Division in this regard.

Copyright Business Recorder, 2021