Export of sugar approved by inter-ministerial body

An inter-ministerial committee headed by Commerce Minister on Monday approved export of 1.5 million tons of sugar in three phases with a subsidy of Rs 10.70 per kg, well-informed . However, the volume of subsidy will linked with international trend, the sources said adding as international prices would reach at $ 500 per ton subsidy would be withdrawn. Sugar millers would be bound to clear all payments of growers. Provincial Cane Commissioner will give a certificate that mills have cleared growers'' payments.

It has been decided that if prices increase from current level export will be stopped. Secretary Commerce, Secretary Ministry of National Food Security and Research and Secretary Ministry of Industries and Production are members of the committee which is empowered to recommend quantity of sugar for export and the volume of subsidy. However, the ECC of the Cabinet is the final authority to approve quantity and rebate/subsidy.

A delegation of Pakistan Sugar Mills Association (PSMA) headed by its Chairman Javed Kayani recently held a meeting with Prime Minister Shahid Khaqan Abbasi and apprised him about the woes of the industry and growers. PSMA wants government permission to export 1.5 million tons of sugar immediately with a rebate of Rs 19 per kg. The Prime Minister directed both the Commerce Ministry and Industries Ministry to formulate a well thought-out proposal for the ECC.

Giving details, sources said, ECC in its decision of December, 2016 had allowed the export of 225,000 tons of sugar on March 31, 2017 with the condition that in case domestic sugar price stability as compared to December 15, 2016 of Rs 62 per kg is not maintained, the inter-ministerial committee headed by Commerce Minister would recommend to the ECC to stop further export.

The second monthly meeting of the committee was held on February 9, 2017, which noted that the domestic national average price of sugar during the week ending on February 2, 2017 was Rs 64.12 - 2.4 per cent higher as compared to price of December 15, 2016 requesting a slight decline in exports since the first meeting of the committee. In March 2017, PSMA requested for (a) the extension in the deadline of the ongoing export of sugar from March 31, 2017 to May 31, 2017 owing to Pak-Afghan border closure Torkham and (b) for permission to export an additional 500,000 MT of sugar in addition to 225,000 MT already allowed.

On the request of MOC, SAB of MoI&P, in its meeting held in March 2017 recommended an additional sugar exports of 400,000 MT. The PSMA''s request and SAB''s recommendations were discussed in the inter-ministerial committee meeting held in MoC on March 16, 2017 and after detailed deliberations an additional 200,000 MT of sugar was recommended to be exported till May 31, 2017 in the ECC. Moreover, the deadline for ongoing sugar allowed by the ECC on December 28, 2016 was extended upto April 30, 2017.

PSMA once again approached Ministry of Commerce in May 2017 to extend deadline for sugar export allowed by ECC in its decision of March 28, 2017 from May 31, 2017 June 30, 2017 along with claim that as opposed to its earlier estimation of 5.5 MT the country is going to have an overall sugar production of 6.985 MT giving a total surplus of 1.475 MT after a country-wide consumption of 5.1 MT. PSMA requested MOI&P to convene a meeting of SAB to work out the sugar surplus for further export. SAB in its meeting held on May 17, 2017 worked out the total available sugar at 8.039 MT by the end of current crushing season by adding the current production of 7.033 MT and a carryover stock of 0.996 MT (7.043+0.996=8.039).

Out of the total available sugar, after deducting the total annual consumption of 5.1 MT strategic reserve of 0.630 MT for 45 days and the already allowed export quantity of 0.425 MT (5.1+0.630+0.425=6.155), the SAB worked out a net available surplus of 1.884 MT (8.039-6.155=1.884), out of which it recommended exporting 1.2 MT. On May 5 SAB also mentioned that PSMA would send in writing "a firm resolve" to maintain the price stability, which has been received with the assurance from PSMA that "government''s instructions regarding price stability will be adhered to in letter and spirit".

The sources said, in pursuance to SAB''s meeting, a meeting of the inter-ministerial committee was held on May 25, 2017 and while the deadline for export of sugar was recommended to be extended upto July 31, 2017, the SAB''s recommendation to allow an additional export of 1.2 MT of sugar was deferred till the next meeting of the committee to be held in the last week of Ramazan.

According to sources, as decided in the meeting held on May 25, 2017, a meeting of the inter-ministerial committee was held on June 20, 2017 in which an additional quantity of 0.6 MT of sugar was recommended to be exported to the ECC of the Cabinet. ECC in its decision of July 18, 2017 had allowed export of 0.3 MT of sugar without any deadline. On the request of PSMA, another meeting of the SAB was held in MoI&P on September 7, 2017 after which the SAB recommended 1.5 MT of additional sugar to be exported with a subsidy of Rs 10.7/kg against Rs 19 per kg as demanded by the sugar industry.