February 12, 2006	Sunday	Muharram 13, 1427

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ISLAMABAD, Feb 11: A slight decrease of 2.87 per cent in the country’s sugarcane production in the year 2005-06 does not justify the prevailing high sugar prices as enough imports have been made to meet the shortfall.

According to official figures the sugarcane production declined to 45.886 million tons during the 2005-06 season as against 47.243 million tons recorded during the corresponding period of the fiscal year.

Statistics obtained from the Ministry of Food, Agriculture and Livestock showed that the 2005-06 sugarcane production declined by 3.17 per cent in the Punjab province and 8.77 per cent in Sindh, whereas a growth of 11.08 per cent in the NWFP was registered during the year 2005-06 against the last year.

According to figures collected from the Pakistan Sugar Mills Association (PSMA), sugar manufactured from the sugarcane production during the year 2004-05 stood at 3.115 million tons. Of these 3.071 million tons were lifted from the mills while the 44,796 tons remained as stock with them during the same period. The stock was carried over to the sugar season of 2005-06.

On the other hand, the general sales tax (GST) collected from sugar millers declined by 8.63 per cent to Rs3.407 billion during the first half of 2005-06 as against Rs3.729 billion over the same period of the last year, thus raising the question of tax evasion by the huge sector. The GST had been collected from consumers at retail stage but had not been deposited to the national kitty.

Further analysis of the statistics showed that the negative growth of 2.87 per cent recorded in sugarcane production during 2005-06 would mean a sugar production decline in the range of 88,000 tons this year. This means the current year’s sugar yield should reach 3.028 million tons on the basis of production achieved in 2004-05.

In the crushing period that started in last December sugar mills produced 934,412 tons till January 15 of which 452,678 tons were lifted and 481,733 tons were lying with the mills across the country.

The statistics further revealed that the mills also have TCP replenished reserves which stood at 149,795 tons. It was bought by TCP from local sugar mills.

PSMA figures confirmed that the sugar mills have a stock of 676,325 tons of sugar, including TCP reserves, till January 15.

According to figures obtained from the Pakistan Revenue Automation Limited — an organization of the Central Board of Revenue (CBR) — Pakistan imported 595,079 tons of refined sugar during the first six months (July-Dec) of the current fiscal year.

At the same time a quantity of 287,281 tons of raw sugar was imported during the first half of the year. The raw sugar was also converted into refined sugar, which comes to around 95 per cent of raw quantity.

Figures showed that the decline in local sugarcane production was well protected by massive increase in the imports of both raw and refined sugar, which also resulted into a collection of Rs1.045 billion in general sales tax (GST) in 2005-06 as against of Rs12 million over the same period of the last year, indicating an increase of 8,608.3 per cent.

Sources said that there was no reason for such a huge increase in the price of sugar at retail stage as it was just the start of the season. “The country has enough reserves which were imported at cheaper prices at a landed cost of around Rs27 per kg but has been sold at around Rs40 per kg in the market,” a source said.

The sources said some millers were selling sugar unofficially at Rs35-36 per kg to the market where dealers sold it for around Rs40 per kg.

According to the sources, the government failed to break the cartel of the sugar millers and hoarders and was linking domestic prices to international market to divert attention from the real situation at home.