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ISLAMABAD: The government is to allocate sugar quota to mills for exports on the basis of their installed capacity as no sugar has been exported so far out of already approved quantity of 100,000 MTs, well informed sources in Commerce Ministry told Business Recorder.

Sharing the details, sources said the ECC was informed on January 3, 2023 that the 4th meeting of Sugar Advisory Board (SAB) was held in the Ministry of National Food Security and Research (NFS&R), Islamabad on January 3, 2023 under the Chairmanship of Chaudhary Tariq Bashir Cheema, Federal Minister for NFS&R.

Sugar Advisory Board reviewed the data provided by provinces and FBR regarding sugar stocks for 2021-22, sugarcane production estimates 2022-23, sugar production estimates 2022-23 and estimated projected annual sugar consumption. During the meeting crushing status in each province and recommendations of Punjab and Sindh for export of sugar were discussed.

Ministry of National Food Security and Research further noted that SAB deliberated on the data provided by provinces and FBR. SAB observed variations /inconsistencies in the data shared by the provinces and FBR. Provinces were repeatedly changing their figures of sugar consumption and production. Resultantly, projections of sugar production in the provinces do not appear to be factually correct. Provinces should re-work on the data, as already requested through NFS&R on December 27, 2022 and submit before the next meeting of the SAB.

Sugar export to be halted if local price rises: ECC

Chair of SAB argued that 150,000 tons should be allowed for export on first come first served basis. Similarly, as previously allowed quantity was still not exported therefore, it should also be exported on first come basis. Minister for Commerce and PSMA were of opinion that 200,000 tons should be allowed for export and distribution of export quota should be left to PSMA.

The SAB during its fourth meeting made following recommendations for consideration and approval of the ECC: (i) export of 150,000 MT to be approved, on first come first serve basis or export of 200,000 MT of sugar and quota be distributed through PSMA; (ii) un-exported quantity of sugar from the previously approved 100,000 MT to be also exported on first come first serve basis or quota should remain with PSMA as decided in 3rd SAB; (iii) PSMA shall undertake that price of sugar will not increase in domestic market from Rs 85-90/kg (ex-mill) for 2021-22 stocks; (iv) in case of increase in domestic sugar price, SAB shall recommend to ECC further discontinuation of exports on immediate basis; (v) no subsidy whatsoever shall be provided to exporters by the Federal/Provincial Governments; and (vi) PSMA and Cane Commissioners shall ensure approved Minimum Indicative Prices (MIPs) and timely payment to the growers.

According to sources, the forum discussed the matter threadbare and observed so far no amount of sugar has been exported from the previously approved 100,000 MT. The forum also discussed the issues relating to allocation of quota for export of sugar. It was suggested that 250,000 MT of sugar may be allowed to be exported, inclusive previously approved 100,000 MT quantity, and the quota of export may be determined on the basis of installed crushing capacity of sugarcane of the provinces. The forum agreed to the proposals.

After detailed discussion, the ECC allowed (i) export of 250,000 MT of sugar inclusive of previously approved quantity 100,000 MT of sugar. The maximum limit for realization of export proceeds shall be within 60 days of opening of LC for export of sugar; (ii) quota of export shall be determined on basis of installed crushing capacity of sugarcane of the of the provinces; (iii) State Bank of Pakistan shall update the ECC on export of sugar, on fortnightly basis; (iv) PSMA shall undertake that price of sugar will not increase in domestic market from Rs 85-90/kg (ex-mill) for 2021-22 stocks.

In case of increase in domestic sugar price, SAB shall recommend to ECC further discontinuation of exports on immediate basis. No subsidy whatsoever shall be provided to exporters by the Federal/Provincial Governments. PSMA and Cane Commissioners shall ensure approved MIPs and timely payment to the growers.

The sources said, apparently PSMA wants increase in price of sugar in domestic market under the garb of export approval which is evident from the fact that no export has been done so far from the previously approved quantity of 100,000 MTs.

Copyright Business Recorder, 2023

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