Export permission: MoC casts doubt on PSMA’s surplus sugar figures

ISLAMABAD: The Commerce Ministry has reportedly expressed doubts on the figures of surplus sugar presented to the federal government to seek export permission, well-informed sources in Commerce Ministry told Business Recorder.

“The claim of PSMA to export sugar is based on dubious figures which if it materializes imply the price can go beyond Rs 200 per kg in the domestic market,” the sources added.

It is circulating in the government circles that exporting sugar is compromising the water resources of the country.

PSMA seeks permission to export ‘expensively produced’ sugar

According to latest numbers, the stock of sugar as on April 30will not be more than 4.4 to 4.5 million tons and in view of the consumption pattern in the country the average per capita consumption is around 25kg while on a conservative basis if it is assumed that the monthly offtake is roughly 530,000 tons then a quantity of about 3.7 million tons is required for a period of seven months i.e., until November 30, 2024 which leaves the surplus of about 800,000 tons of sugar approx.

As per working of the federal government, one-month additional stock is required to be kept in the country before permission to export can be granted which leaves the surplus at about 270,000 tons as against the alleged advertised figure of 1.5 million tons which PSMA is requesting to be allowed to export.

“If the figures are looked at before the start of next crushing season for any possible disposal if need be at that point in time, then three mills owned by members of the current ruling elite would be in possession of a sizeable quantity of sugar enabling them to make windfall profits, “said the sources.

It is also apprehended at the government level that large groups will also be minting money once the price goes up to Rs200 and above, at the cost of poor consumers of this country.

Previously, the industry after getting permission to export was able to increase the price to Rs. 180/ kg with the caretaker setup making efforts to bring the sugar price under control by curbing smuggling. The Punjab government in a letter to Federal Government has also reportedly rejected the proposal for allowing export of sugar.

At a recent meeting of Sugar Advisory Board (SAB) it was agreed to seek authenticated data on available sugar stocks, including expected sugar production from beet, and recommendations regarding export from provinces before taking any final decision on allowing export of sugar.

The sources said, SAB will again review the data in the next meeting before recommending the export of this food commodity, which may have an adverse impact on domestic price and food inflation, particularly on low-income segments.

Copyright Business Recorder, 2024