ISLAMABAD, Sept 11: Prime Minister Mir Zafarullah Khan Jamali has allowed commerce ministry to purchase 100,000 tons of sugar from millers to help them dispose of the surplus stock laying with them.

Well-placed sources in the ministry of agriculture told Dawn on Thursday, the ministry would purchase sugar through Trading Corporation of Pakistan (TCP) at the prevalent ex-mill rates.

The TCP would keep it as buffer stock for releasing at the appropriate time to stabilize prices in the local market, said the sources.

The decision was taken by the prime minister while approving the short and long-term strategy for resolving the problems confronting the sugar industry.

According to sources, while taking this decision the views of the ministries of commerce and industry who were opposing the purchase of sugar from millers on subsidy were ignored.

The government had constituted a four-member ministerial committee on the directive of the prime minister headed by finance minister and comprising ministers for commerce, industry and production and food, agriculture and livestock to work out proposals for resolving the sugar industry crisis.

Sources said it was also decided that sugar would be purchased from the mills on the condition that they would start crushing from November next and would also clear all the dues payable to the sugarcane growers.

Besides, the provincial governments would be asked to enforce the provincial sugar factory control act in respect of the start of the crushing season and payments to the growers.

The ministry of industry has already informed the government that the exchequer will face a net loss of Rs700 million in case the government accepted the sugar millers’ demand.

Already the government had sustained a loss of Rs593 million on account of export of 100,000 tons of sugar by TCP earlier.

According to the long-term strategy worked out for the sugar industry, sugar mills would have to improve their efficiency by reducing cost of production.

Pakistani sugar would be more competitive following the withdrawal of subsidy by the developed countries which would result into rise in the sugar prices in the international markets.

It was recommended that the sugar mills should go into value addition, undertake research and development (R&D) programme and focus on improving productivity and recovery of sugar. The sugar technologists should help them in their R&D programme.

It was also decided that the mills should also focus on promotion and crushing of low delta crop such as sugarbeet.