ISLAMABAD: The Sugar Advisory Board (SAB), Wednesday, decided to link the export of surplus sugar with its price stability in the country.
The decision was taken here during a meeting of the SAB under the chairmanship of Rana Tanveer Hussain, Federal Minister for Industries and Production.
The minister in his remarks reiterated that an increase in sugar prices directly impacts the public at large. He said we should first meet the local demand of sugar before considering the export option to earn foreign exchange.
It was decided that the government and Pakistan Sugar Manufacturing Association (PSMA) would devise a mechanism, whereby, price stability of sugar would be ensured before exporting surplus stock produced in the country. The provinces and PSMA would ensure a smooth supply of the commodity in the domestic market and price stability till the start of the next crushing season.
Recognising the direct impact of rising sugar prices on the public, the minister highlighted the need to ensure an adequate supply to meet local needs before considering export options as a means to earn foreign reserves. The agenda of the meeting was to review the overall stock position of the sugar in the crushing season 2023-24 and to evaluate the proposal submitted by the PSMA to export surplus stock of sugar available in the country after meeting local consumption needs.
SAB fails to take decision on sugar export
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 the export of sugar. The forum will again review the data in the next meeting before recommending the export of this essential food commodity, which may have any adverse impact on domestic price and food inflation, particularly on low-income segments.
The meeting reviewed the overall stock position of the sugar in crushing season 2023-24. It was attended by the Minister for Commerce Jam Kamal Khan and Federal Secretary for Industries and Production Waseem Ajmal Chaudhry.
During the meeting, the representatives of PSMA informed the government officials that Pakistan at present has around 1.6 million tons of additional sugar which should be exported. The PSMA has asked the government to allow the export of one million tons of refined sugar in the first phase which will bring around $650-700 million in foreign exchange for the country and the rest of the 0.6 million tons of sugar be exported in two phases in May and June 2024.
The millers argued that last year sugarcane price was Rs350 per 40kg which now has reached Rs450 per 40kg and the production cost of sugar at present stands at Rs170 per kg while in the retail market refined sugar was available in the range of Rs145-150 per kg which is the lowest price in the world.
The PSMA delegation also informed the government that if the government did not allow sugar export it would result in the smuggling of the commodity to Iran, Afghanistan, and other countries as a result, the country would be deprived of precious foreign exchange while smugglers would take advantage of the situation.
The PSMA officials said that locally sugar production price was around $503 per ton while in the international market it stands at $650 per ton, therefore, export permission will benefit both the industry and the country. The meeting was further informed that in Pakistan industrial use of sugar stands at 85 per cent and the rest 15 per cent was domestic use. Moreover, 18 percent general sales tax (GST) was imposed on sugar.
Copyright Business Recorder, 2024