ISLAMABAD: After resisting for weeks, the government has finally made up its mind to allow the export of sugar to facilitate millers and sugarcane farmers in depleting old stocks and speed up fresh crushing.
Informed sources told Dawn that a formal decision on the exact export quantities and the related mechanism would be taken at back-to-back meetings of the Sugar Advisory Board (SAB) and the Economic Coordination Committee (ECC) of Cabinet on Tuesday.
These sources said a SAB meeting led by Minister for National Food Security and Research Tariq Bashir Cheema would meet in the morning to firm up recommendations for export quantities and safeguard measures to avoid shortages and price hikes in the domestic market.
The board also comprises the commerce minister and secretaries for commerce, industries and food besides one member each from four provinces and provincial sugar mill associations.
A formal summary of sugar export would then be immediately taken to the meeting of the ECC, tentatively the same day to take a formal decision. The export help fetch some direly-needed foreign exchange earnings, according to the sugar industry and relieve the mills and farmers from cash flow problems and financing costs.
The industry has been demanding the export of 1.2 million tonnes of sugar and delaying crushing as provincial governments enhanced minimum support by over 30pc for the current crop season.
The government has been resisting sugar export, fearing that this would lead to shortage and price hikes in the domestic market to the political disadvantage of the incumbent PDM government already facing public criticism for unprecedented inflation that hit 26.6pc in October.
Finance Minister Ishaq Dar on Monday presided over a meeting to review the demand and supply situation of sugar. The reports of stocks verified by FBR’s track and trace system were discussed. The national food security minister, prime ministers’ special assistants on finance and revenue Tariq Bajwa and Tariq Mehmood Pasha also attended besides senior officers.
The meeting reviewed the available stock position and future demand and “was apprised that sufficient stocks of sugar are available,” an official statement said, adding the meeting was told that mills had started crushing in Sindh and Punjab provinces and that the production of sugar in the province of Sindh will be less than last year due to floods.
The sugar industry claims that the 33pc increase in sugarcane support price from Rs225 per 40 kg to Rs300 would in any case increase the sugar price by 33pc to Rs115 per kg from about Rs85 at present.
Meanwhile, cane crushing season in Punjab has formally begun as 31 out of a total of 41 sugar mills located in Punjab have become operational.
“At least 31 out of 41 mills have started crushing sugarcane as of Monday (Nov 28), while notices have already been issued to the rest of the 10 units for violating the deadline of Nov 25,” says Punjab Cane Commissioner Hussain Bahadar Ali Shah.
He says that seven of the defaulting mills claim that as growers are not supplying them sugarcane, their units are thus lying idle, while three others state that they were experiencing some faults at their plants.
Published in Dawn, November 29th, 2022