Ministry recommends exporting 0.2 million tons of sugar

An inter-ministerial panel headed by Commerce Minister Engineer Khurram Dastgir has recommended export of an additional quantity of 0.2 million tons of sugar by April 30, 2017 against 0.4 million tons recommended by the Sugar Advisory Board (SAB), a body which represents federal as well as provincial governments and growers, well-informed sources told

The committee has also decided to recommend extension in deadline for ongoing export permission of 0.225 million tons for one month. Commerce Ministry will send a summary to the Economic Coordination Committee of the Cabinet in its next meeting.

This was the outcome of two meetings held on Thursday, i.e. first meeting held in the Ministry of Industries and Production at 11am whereas the second was held in Commerce Ministry at 3pm.

The Khurram-led committee took this decision hours after the Sugar Advisory Board (SAB) headed by Secretary Industries and Production (MoI&P) Khizer Hayat Gondal approved the export of an additional quantity of 0.4 million tons against the industry''s request of 0.5 million tons, the sources added.

An official told that PSMA Chairman Javed Kayani led the industry''s team and gave a detailed presentation and forecast to the board. He said Punjab has so far produced 3.4 million tons, whereas Sindh has produced 1.8 million tons and KPK 388,000The statistics imply that 5.6 million tons sugar has already been produced. Representatives of provincial governments stated that Punjab will have another 0.4 million to 0.5 tons whereas Sindh will have 0.1 million tons more and KPK will end up with 0.4 million tons.

The secretary MoI&P then tabulated the facts as follows: (i) Punjab 3.91 million tons; (ii) Sindh 1.90 million; and (iii) KPK 0.400 million. This implies total estimated production would be 6.21 million tons, in addition to carryover stock of 0.950 million tons which enhances total availability to 7.16 million tons against estimated consumption of 5.52 million tons (determined on the basis of 13 instead of 12 months). After ensuring strategic reserves of six weeks at 0.630 million tons, net available commodity was calculated at 1.01 million tons. Of this the government has already allowed export of 0.225 million tons of sugar by March 31, 2017 which shows that additional available surplus stock for export would be around 0.785 million tons.

Availability for export was worked out for 13 month consumption and 1.5 months strategic reserves which is about 0.8 million tons yet the SAB has recommended 400,000 tons for further export.

According to sources, an exchange of hot words was witnessed between the representatives of Commerce Ministry and sugar industry after the former came forward to oppose the proposal on export of additional quantity of 0.5 million tons.

"The country is already having a serious trade deficit and Commerce Ministry officials are doing politics on sugar. The mindset of Commerce Ministry is always highly negative," the sources quoted Chairman PSMA as saying in the meeting.

Secretary Industries, showing anger at the attitude of Commerce Ministry officials, argued that senior officials should have attended the meeting as it is against "decorum" for a Joint Secretary and Section Officer to attend this very important policy meeting. After deliberations, the Board agreed to allow export of 0.4 million tons of sugar. However, when contacted the Secretary Industries and queried him on his reaction to the harsh language used in the meeting, he said "I don''t think so!"

According to officials in Commerce Ministry, the domestic national average sugar price for the months of January and February, 2017 as per sensitive price index of PBS were Rs 64.80/kg and Rs 63.12/kg respectively. The total sugar quota allocation by the SBP to the sugar mills as of 13.03.2017 was 175,504 MT, which is 78% of 225,000 MT - the actual quantity allowed to be exported by ECC on 28.12.2016.

Commerce Ministry informed the committee that PSMA in its letter of February 22, 2017 requested to extend the deadline for ongoing sugar export from March 31, 2017 to May 31, 2017 owing to the Pak-Afghan border closure at Torkham. Moreover, PSMA requested for permission to export another 500,000 MT of sugar.

According to the Commerce Ministry, latest export data of sugar as reported by FBR shows that export quota allocated by SBP till March 13, 2017, was 175,504 MT whereas 85,003 MT of sugar export had taken place by March 15, 2017.

Commerce Ministry recommended to the inter-ministerial panel headed by Commerce Minister that since the domestic national average price of the sugar on the week ending on March 09, 2017 is Rs 60.10/kg showing a percentage decrease of -4.00% as compared to the baseline price (Rs62.61/kg) on December 15, 2016, the intervention regarding recommendation to halt the ongoing sugar export may not be required.