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ISLAMABAD: The Competition Commission of Pakistan (CCP) is facing a prolonged delay in the recovery of Rs 44 billion penalty imposed on sugar cartel, due to 127 pending petitions in different courts of the country.

Sources told Business Recorder here on Monday that the CCP is constantly stalled in recovery of its penalties with stay orders from courts. Presently, there are 127 pending sugar cases across various courts. This comprises 24 in the Supreme Court, 25 in the Lahore High Court, 6 in the Sindh High Court, while 72 in the Competition Appellate Tribunal.

Presently, there are 127 pending sugar cases across various courts. This comprises 24 in the Supreme Court, 25 in the Lahore High Court, 6 in the Sindh High Court, and 72 in the Competition Appellate Tribunal.

Fighting cartelism: CCP brings enforcement, policy actions under focus

Since July 2023, the Competition Appellate Tribunal has been dysfunctional. The appointment of its chairman is delayed due to the stringent criteria outlined in Section 43 of the Competition Act, 2010. Under these criteria, the chairman must be a retired judge of the Supreme Court or a retired Chief Justice of the High Court, making it a tough job to find a suitable candidate.

According to sources, country’s economic landscape has long been marred by market power concentration and market abuse across various sectors. Sugar industry is its big example. The CCP has faced serious resistance from influential players in the sugar industry.

In Pakistan, around 84 sugar mills 6 and 8 million metric tonnes of sugar annually out of 80 million tonnes of sugarcane cultivated over one million hectares of land. This is sufficient to cater for the needs of 235 million Pakistanis. The nation regularly faces sugar shortages, while the Pakistani sugar industry continues to amass billions in profits.

Sugar prices are unfairly influenced by cartels, smuggling, and hoarding. The government has recently taken steps to combat these issues through the Special Investment Facilitation Council (SIFC), reducing sugar prices and ensuring regular supply.

The pricing of sugar doesn’t follow the usual supply and demand principles, instead, powerful mill owners manipulate the system to raise prices. They do this by pressurising the government to allow sugar exports around mid-year citing excess stocks.

Historically, sugar mills amassed billions through export subsidies granted for sugar exports. This subsidy is the difference between local and international prices.

Allowing sugar export leads to domestic shortages. The situation is worsened by hoarding and smuggling, which prompt price hikes.

Copyright Business Recorder, 2023

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