ISLAMABAD, March 30: A bid by the sugar cartel to take advantage of an impending shortage during the June-November period may trigger another crisis. Official sources said the government estimates showed that sugar mills had pocketed a profit of Rs40 billion since the start of the crushing season in November 2005 and they could earn another Rs50-60 billion during the June-November period.
The sources said a meeting held under Prime Minister Shaukat Aziz on Thursday decided that sugar mills would not be allowed to hold more than 25 per cent of their production at any given time. The meeting to review the sugar situation was held in Karachi, these sources said.
Adviser to the Prime Minister on Finance Dr Salman Shah, who heads the PM’s prices review committee, declined to comment on the sugar situation or the decisions of the meeting. He said economic adviser Dr Ashfaq Hassan Khan would make a comment on the subject as spokesman of the government but Dr Khan was not available on the phone.
The sources said that some elements were trying to destabilise the Shaukat Aziz government. The prime minister, said the sources, had told the president in a recent meeting that he wanted to drop some ministers from the cabinet.
The sources said that as of February 28, the total sugar stocks, including TCP’s stocks, stood at about 1.4 million tons, which were unlikely to last beyond June 2006. After June, only the TCP and a few sugar mills will have sugar stocks to meet the demand as per capita sugar consumption has increased to 26kgs, compared to eight kgs in China, 14kgs in India and 5kgs in Bangladesh.
The sources said that Pakistan Sugar Mills Association (PSMA) had stopped publishing its report detailing quarterly production and stock position because its own figures cearly indicated that some sugar mills had released less than 12 per cent of their stocks during the November-February period.
On the basis of the PSMA figures, the National Accountability Bureau had acquired details of tax evasion and profiteering.
However, the inquiry was stopped at the intervention of the president who was advised that it would expose the whole government and create a political crisis in the country, the sources said.
PSMA’s statistics for the period up to February 28 showed that Ashraf Sugar Mills had released only 14.9 per cent of about 24,000 tons of its total production.
