August 7, 2003	Thursday	Jumadi-us-Sani 8, 1424

ISLAMABAD, Aug 6: The sugar tycoons are influencing the government to allow huge subsidy on export of 100,000 tons sugar through Trading Corporation of Pakistan (TCP), which would result into a huge loss to the national exchequer.

Well-placed sources told Dawn on Tuesday that the exchequer was likely to face a net loss of Rs700 million if the export of 100,000 tons sugar was allowed under the pressure of these influential mills owners.

Previously, the government had borne a loss of Rs593 million on account of 100,000 tons export of sugar by the TCP.

The sources said despite the fact that the Economic Coordination Committee (ECC) could consider the issue, the summary of sugar export has been sent to the cabinet for taking final decision in this regard.

The sources said the cabinet would take up the issue in its next meeting.

The sources said the big millers, which include MNAs, MPAs, national and provincial ministers, had this time, to avoid NAB investigations, involved the TCP in the export of sugar on subsidy.

According to the sources, the ministry of commerce had previously directed the TCP to only buy sugar from the sugar millers and not from the private traders. This resulted into monopolisation of sugar millers on the prices of sugar being purchased by the TCP, the sources said.

The big sugar mill owners have also made a cartel and pooled their resources to dictate their prices to the TCP.

The sources said the cartel quotes its own prices for the selling of sugar to TCP and the TCP has no other option, as bound by ministry of commerce directive, but to accept the offered prices by the sugar millers.

This whole practice resulted into inflated prices quoted by sugar mill owners during March-April 2003 vis-a-vis the ex-mill wholesale market prices prevailing during the same period.

According to sources, the stock in hand with PSMA up to June 30, 2003 stood at 1,567,037 tons. The total average sugar consumption is estimated at 300,000 tons per month.

The sources said that if the sugar crushing season this year started in December next like last year, following the consumption of five months along with the export of sugar in progress of 36,000 tons, the actual surplus with mills owners would come down to 17,198 tons by beginning of the crushing season.

According to the sources, the Ramazan would also fall in October, which is the peak month for the consumption of sugar. The sources further said it was possible that the government might import sugar for domestic consumption in case of maximum exports.