ISLAMABAD, June 15: The government is all set to allow export of 300,000 tons of sugar on a self-financed basis to partially offset the surplus commodity, which could otherwise delay the next crushing season beyond January, a senior government official told Dawn.
A formal announcement to this effect would be made here on Monday following a meeting of the Economic Coordination Committee (ECC) of the cabinet, he said.
The industry would, however, be required to offload 300,000 tons of surplus sugar before September 2003 so that the crushing season could be kick-started well in time.
The official said the ministries of finance, commerce and industries have already agreed to allow sugar export immediately so that the stocks could be partially cleared to pave the way for the start of the next crushing season.
He said the sugar industry would bear all the cost of export, which was estimated to suffer a Rs5 per kg loss as compared to domestic retail price. “Rest assured, there would be no export rebate or any other incentive,” said the official.
Sources said the sugar industry had told the government that unless a part of surplus stock was offloaded, the mills would neither be able to start crushing nor pay money to the growers and banks. This would once again result in a chain of defaults and, ultimately, the crop output would suffer in the years to come.
Already, the government has set a higher sugar production target for the next year at 3.8 million tons as against 3.689 million tons this year, as it expected sugarcane production to rise to 52.5 million tons from current year’s 52.1 million tons. Based on these submissions, the government has agreed to allow 300,000 tons sugar export based on the stocks as of April 30, 2003. The ministry of industries has also forwarded a draft amendment to the relevant SRO, but also warned that the export could slightly impact the local retail market.
The ECC, which meets here Monday to be presided over by the finance minister, would also rescind its own decision taken last year that wound up Pakistan Oilseeds Development Board (PODB).
The sources said the ministry of food, agriculture and livestock has proposed to the committee that PODB should be revived in view of the government’s new policy initiative to discourage import of oilseeds and promote local production, instead.
Last year, the ECC had wound up the PODB on the ground that it was a non-productive organization and had contributed nothing to the oilseed development.
The committee is also expected to enhance gas allocation quota to Pak-American Fertiliser Company from 22 MMCFD to 28 MMCFD. The company had established its new urea plant last year, and required enhanced supplies to run the factory to the maximum capacity.
The ECC would also review the wheat crop situation and firm up final output of the crop during the current fiscal. Earlier, the government had increased production target to 19.2 million tons from the original target of 18.5 million tons, which also resulted in increase in the GDP growth rate to 5.1 per cent from 4.9 per cent.
