28 April 2005	Thursday	18 Rabi-ul-Awwal 1426

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LAHORE, April 27: The Pakistan Sugar Mills Association claimed on Wednesday that the widening communication gap between the government and the sugar industry was creating misunderstanding on both sides due to which the situation is worsening with every passing day.

Responding to an allegation by Prime Minister Shaukat Aziz that ‘cartelization’ by the industry was creating problems, a spokesman of the industry said the impression had been created because of the widening communication gap.

On the contrary, he said, sale of sugar mills had come to a halt since the government allowed unlimited duty-free import of raw as well as refined sugar in December last.

He said the cash flow of the sugar industry had been badly affected owing to the surplus import of sugar and the situation had further aggravated with the active sale of procured sugar by the Trading Corporation of Pakistan through utility stores for Rs23 per kilogram.

It is pertinent to note that the Indian government had never thought of bringing import duty to zero like Pakistan despite a shortfall of about 40 per cent in the last two years. Instead, it continued with the imposition of 60 per cent import duty on sugar in order to protect the industry and farmers, he said.

He further dilated upon what, he said, discriminatory treatment with Pakistan’s sugar industry by quoting the example of cement and steel whose prices had almost doubled during the last two years but the government had not brought down duty on them.

The import duty of 20 per cent on steel was a constant factor whereas the government had reduced 25 per cent import duty on sugar to zero in one go without realizing the vulnerability of the industry, he iterated.

The PSMA spokesman said the sugarcane growers in the Punjab and Sindh had received Rs80 and Rs100 per 40kgs as against the officially fixed price of Rs40 and Rs43, respectively, during this crushing season. “It means that instead of paying an amount of Rs30 billion, the industry ended up paying Rs50 billion as growers formed a cartel throughout Pakistan.

“The government did not appreciate the sugar industry for pumping such a huge amount to rural areas,” he said.

He said sugarcane price covered 80 to 90 per cent cost of production. Once the price was paid, the government unilaterally opened duty free import of sugar and even waived six per cent withholding tax on import of sugar. This pulled the rug from under the sugar industry.

As a matter of fact, the sugar industry had suffered on two counts: it made heavy payments to growers and still faced the standstill sale situation because of the heavy inflow of zero-rated imported sugar in the country.

“The PSMA has requested the prime minister at least on three occasions to hold meetings of stakeholders, but to no avail. No such meeting has been convened so far to remove an air of mistrust,” the spokesman said.