ISLAMABAD, Oct 14: The government has agreed to keep the sugar price at Rs34 per kilogramme after it accepted the millers’ main demand that it will not release its stock in the open market.
Sources said on Saturday that the decision was reached at a meeting between the millers and a four-member government committee. The millers agreed not to change the price after the government accepted most of their demands.
The sources said that government agreed with the millers that Trading Corporation of Pakistan (TCP) would not release its sugar stock in the open market immediately after Eid to give millers time to sell their stock.
The sources said that the TCP stock, which was imported a few months ago at a relatively high price, would become even more costlier because of high warehousing cost, which along with banking charges, amounted to 40-paisa per kg per month. The carryover cost would increase and subsequently incur loss on the national kitty.
The sources said that millers told the government that they had a buffer stock of more than 500,000 tons. The millers, however, were reluctant about selling their stock to the TCP.
The decision would doubly benefit the millers as they would not only have a higher fixed rate for the upcoming season, but they would be able to sell sugarcane byproducts, meaning additional income for them.
The sugar price might have declined if sugarcane production had crossed the 50-million-ton target. The duty-free import of raw sugar to offset any shortfall in sugarcane production would also depend on its price in the international market, the sources added. However, the agreement meant that the options could not be availed now, the sources said.
A senior official, who attended the meeting with the millers, said that the decision would have an immediate effect. He said that the capping price was calculated in consultation with the four provinces.
This price, he said, would include 15 per cent general sales tax and wholesaler and distributors margin. The sources said that the TCP’s stock amounted to more than 715,000 tons.
