Sugar export: ECC makes three modifications in MoC summary

The Economic Co-ordination Committee (ECC) of the Cabinet has reportedly made three modifications in summary of Commerce Ministry on export of 0.2 million tons of sugar.
Giving the background, sources stated that the additional 0.225 million tons of sugar for export and extension in already allowed quantity of 0.25 million tons till March 31, 2017 has been allowed by the ECC with the condition that in case domestic sugar price stability as compared to December 15, 2016 [Rs 62.61/kg], was not maintained, the Inter-ministerial Committee constituted by the Prime Minister would recommend to ECC for stoppage of further exports.
Accordingly, the committee reviewed the domestic price of sugar in its two meetings held on January 11, 2017 and February 09, 2017 and noted that there was a 2 to 3% fluctuation in the price of sugar in domestic market since December 15, 2016, which did not warrant an intervention.
According to latest FBR data, a total of 0.085 MMT of sugar has been exported which comes to around 37.77% of the total export [0.225 million] allowed by ECC. Pakistan Sugar Mills Association (PSMA) has requested for an extension in the deadline of the ongoing export of sugar from March 31, 2017 to May 31, 2017 due to closure of Pak-Afghan border at Torkham. PSMA had also requested for permission to export an additional 0.500 MMT of sugar.
Sugar Advisory Board (SAB) considering the request of PSMA had indicated a total available sugar stock of 7.195 MMT, out of which, 5.525 MMT would be the total consumption over thirteen months. Moreover, keeping a strategic reserve of 0.63 MMT for 45 days and deducting 0.225MMT of already allowed quantity of export, the total off-take/consumption was calculated as 6.38MMT (5.525+0.63+0.225). After taking the total-off take into account, the net surplus, would be 0.815MMT (7.195-6.38). SAB has recommended a further export of 0.400 MMT of sugar.
Ministry of Commerce further noted that Inter-ministerial Committee considered the requests of PSMA and SAB in its meeting held on March 16, 2017 and after detailed deliberations, recommended further export of 0.200 MMT of sugar (without any subsidy) subject to the following conditions: (i) the committee constituted by the Prime Minister will continue to meet every month to review the sugar price/ stock/ export situation; (ii) in case of any abnormal increase in the domestic price of sugar as compared to December 15, 2016, which was also the baseline price adopted for the ECC decision of December 28, 2016, the committee would recommend to the ECC the stoppage of further exports; (iii) only those mills may be allowed to export which have cleared outstanding dues of farmers relating to last season and are crushing at full capacity; (iv) the export quota will be approved and monitored by the SBP on first come first serve basis; and exports will be completed within 45 days of allocation of quota or 31st May, 2017, whichever comes earlier.
Ministry of Commerce requested the ECC of the Cabinet that the deadline for the ongoing export of sugar may be extended up to April 30, 2017.
After a detailed discussion, the ECC approved proposals of Commerce Ministry with three modification which are as follows: (i) in case domestic sugar price stability as compared to December 15, 2016, is not maintained, the committee would immediately recommend to the ECC for stoppage of further exports; (ii) only those mills may be allowed to export which have cleared outstanding dues of farmers relating to last season and have crushed at full capacity; and (iii) exports will be completed within sixty days of allocation of quota or May 31, 2017, whichever comes earlier.