Islamabad:
The cabinet postponed the export of additional 100,000 tonnes of sugar till the start of the new crushing season and directed the Industries Ministry to bring a fresh case after considering all relevant parameters.
Earlier, the Economic Coordination Committee (ECC) allowed the export of 100,000 tonnes of sugar, which was placed before the cabinet for its nod in a recent meeting.
Sources said the cabinet refused to ratify the decision of the CEC and directed the Directorate of Industries and Production to refer the case to the CEC for review in a holistic manner.
He directed that all relevant parameters should be taken into account, including retail prices, available stocks and domestic sugar requirements till the start of the next crushing season later this year.
Separately, the Sugar Advisory Board (SAB) held a meeting, headed by the federal minister for industries and production, on August 21, 2024, where it reviewed the sugar stock data provided by the provinces and the Federal Board of Revenue (FBR) for crushing. year 2023-24.
All stakeholders agreed that there was a stock of 2.773 million metric tons on August 15, 2024, and the total consumption in the last eight and a half months was 4.797 million metric tons.
It was noted that over the next three and a half months, the expected sugar intake would follow the same pattern seen over the previous eight and a half months. Therefore, consumption would be around 1.974 million tonnes.
After taking into account the planned export of 0.055 million tonnes out of a total of 0.150 million tonnes and the possible export of 0.040 million tonnes to Tajikistan, the carryover stock for next year will be 0.704 million tonnes.
The participants in the SAB meeting, after detailed discussion, agreed that even if 0.10 million tonnes were allowed to be exported, the opening stock for the next growing season was expected to be 0.604 million tonnes, which would be higher than the average national consumption of a month.
For this reason, the SAB recommended an additional export of 0.10 million tonnes of surplus sugar on the same terms and conditions as permitted by the ECC in its decision dated 13 June 2024 with the following modifications:
Due to the procedural delays experienced in the export of sugar, the period allowed for export from the date of allocation of quota by the respective sugarcane commissioner may be extended from 45 days to 60 days.
It was pointed out at a CEC meeting that export revenue would be received in advance in the case of Afghanistan only through banking channels. However, export proceeds in case of letter of credit (LC) can be allowed within a period of 60 days from opening of LC.
During the discussion that followed, the Directorate of Industries and Production explained that the export of 0.15 million tons of sugar was allowed by the decision of the Cypriot Council of June 13, 2024.
The ECC observed that the benchmark for sugar exports should be the wholesale price instead of the retail price, which would ensure proper price monitoring.
The forum also suggested liberalization of the sugar sector, formulation of sugar policy and proper zoning of sugarcane crops in order to meet the country’s requirements.
The Ministry of Planning, Development and Special Initiatives added that the Pakistan Bureau of Statistics (PBS) dashboard provided wholesale and retail prices on a daily basis, which would help in effective price monitoring.
The ECC was informed that ex-factory prices were not indicative of market price trends as sugar mills involved in price manipulation reportedly had investors who stockpiled stocks outside the factories in separate warehouses.
The ECC directed the Directorate of Industries and Production to ensure daily monitoring and review of sugar stocks and prices. In case price gouging is found, immediate action should be taken against the violators.
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