LAHORE: The Pakistan Sugar Mills Association (PSMA) has refused to sell the sweetener at new ex-mill rates announced by the government.

The Controller-General of Prices, Ministry of Industries and Production, had announced on Friday Rs70.42 per kg as the ex-mill rate of sugar, claiming the rate was determined on the basis of the tax returns filed by the sugar mills regarding the sale of the sweetener during the six-month period – from Dec 2020 to May 2021.

The notification issued by the Controller-General fixed the per kg retail price of white crystalline sugar at Rs88.28 after including 17 percent sales tax, ancillary costs, profits of wholesaler and retailers. It directed the provincial authorities to implement the rates under SRO F.No 1(7)/2005-CA, Vol-III, dated Aug 14, 2006, and to take action against the mills, dealers, distributors and retailers not complying with this order under the Price Control and Prevention of Profiteering and Hoarding Act, 1977.

The order has come into force immediately and shall remain in force till Nov 15, 2021.

Claims decision is against SECP rules, Constitution

But the PSMA has refused to accept the new official ex-mill rate, terming the government decision erroneous.

“The Rs70 per kg ex-mill rate of sugar is unacceptable. The official decision is erroneous as we cannot sell sugar at this rate,” sugar millers’ body chairman Iskander Khan said in a statement.

He claims that at present the ex-mills rate is Rs95 that includes sales tax of Rs14 per kg. The new rate is a conspiracy against the sugar industry, as well as the farmers, he adds.

Fearing that the mills will go bankrupt if the official rate of sugar is implemented, he says the government decision is also in violation of the Security & Exchange Commission of Pakistan (SECP) rules and the free trade clause of the Constitution.

Mr Khan says the government would have been justified in taking the decision had sugar been hoarded and in short supply in the market.

He say categorically that it is impossible for the millers to sell sugar at a rate cheaper than its production cost.

Published in Dawn, July 19th, 2021