ISLAMABAD: Amid political hype over price hike, the Economic Coordination Committee (ECC) of the Cabinet on Monday turned down a move for sugar import and instead put an immediate ban on its export.
The meeting presided over by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh also asked the provincial governments to take administrative measures to attack blackmarketing and profiteering by the middlemen and ensure smooth supplies to the market.
The ECC did not agree to a proposal of the Ministry of Industries and Production (MoIP) for duty and tax free import of about 300,000 tonnes of sugar import. That would have cost the government about Rs14bn on account of duty and tax waivers.
The decision to reject the sugar import was taken despite earlier reports that Prime Minister Imran Khan, who is also minister incharge of MoIP, had approved duty and tax free import of 300,000 tonnes of sugar import to address its rising prices in the market. However, the ECC believed the imports would be of no help in price control and could in fact be counter-productive.
The MoIP reported that about 1.72 million tonnes of sugar stocks were available with the sugar mills at present and sugarcane crushing was still in process. The country’s monthly consumption ranged between 450,000-480,000 tonnes.
In response to questions, the committee was informed that landed cost of imported commodity would be around Rs79 per kg that would go significantly higher than Rs80 with upcountry transportation and incidentals. As such, the imported price would become a benchmark in the country and local suppliers and market players would take undue advantage.
The MoIP also explained that about 350,000 tonnes out of a total 1.1m tonnes of sugar export allowed in late December 2018 had not been exported as yet. Also, the current season’s total production was also estimated at about 5.7m tonnes.
According to informed sources, Dr Shaikh noted that sufficient stocks would be available for domestic production provided adequate vigilance is ensured by all the stakeholders.
An official statement said the ECC was told that “adequate stocks of sugar are available in the country but prices in both domestic and international market are showing an upward trend”.
Therefore, in order to maintain the prices in the domestic market, ECC banned export of sugar. The committee further directed that in case there was considerable decrease in available stock, it would be willing to reconsider the proposal for import of sugar as well as the removal of tariff and taxes on subject import.
“The members of the ECC were all convinced that there are adequate stocks of sugar available in the country and there is currently no compelling reason to import the commodity in the country,” said an official statement. The MoIP was directed “to talk to the provincial governments to control price of the commodity in the country as it is provincial subject”.
Loan Extension: The ECC also approved the continuation of funding facility to Inter State Gas System Ltd (ISGSL) for another year and the existing loan agreement between the ISGSL and Government Holdings Private Limited (GHPL) – a company of the federal government should continue for another year given inability of the ISGSL to stand on its own feet.
The Ministry of Petroleum had proposed the loan agreement for two years because the ISGSL had not been able to ensure commercial viability of any of its projects since its inception in 1996. However, the ECC noted that “any extension thereafter would be subject to progress on the undertaken projects and as soon as the first project reaches closure” adding that “ISGS needs to become financially self-sustaining and after closure of the project it will also put forward a business plan how it will return the loan”.
It was proposed that the ISGSL to perform functions entrusted to it by the Pakistan government to undertake projects of strategic nature but it should have a reliable funding arrangement till the completion of some of the gas pipeline projects currently under progress.
The ECC also approved a technical supplementary grant of Rs3.3 billion during current fiscal year Prime Minister’s Special Package to Implement ‘Skill for All’ strategy as catalyst for technical and vocational education training (TVET) sector development in the country.
The ECC also approved a request by the Ministry of Law and Justice for a technical supplementary grant of $1 million equivalent to Pak-rupees as legal and miscellaneous expenses in the case of Reko-Diq. The ECC also directed the Ministry to give a detailed briefing on the details of the case in the next meeting.
Published in Dawn, February 11th, 2020