Ignoring PM’s audit direction, ECC allows sugar export

Published December 16, 2022
Finance Minister Ishaq Dar presides over the ECC meeting in Islamabad on Thursday. — PID photo
Finance Minister Ishaq Dar presides over the ECC meeting in Islamabad on Thursday. — PID photo

ISLAMABAD: Sidestepping Prime Minister Shehbaz Sharif’s instructions for an independent stock audit, the Economic Coordination Committee (ECC) of the Cabinet on Thursday finally allowed the export of 100,000 tonnes of sugar with the condition that millers will ensure domestic prices at the existing level for 45 days.

The ECC meeting presided over by Finance Minister Ishaq Dar, took this decision on the recommendations of the Sugar Advisory Board (SAB) and the provincial governments.

Informed sources said that despite variations over available stocks at the moment by the Federal Board of Revenue (FBR), Pakistan Sugar Mills Association (PSMA) and provincial governments, all of them projected more than 800,000 tonnes of surplus stocks as of Dec 2.

It was placed on record without much emphasis that PSMA had always been reporting domestic consumption at 20,000 per day (7.3m tonnes annual requirement) but at the last moment claimed it to be 18,729 tonnes per day (6.8 million tonnes per year — a case for higher surplus and thus export).

The meeting was told that contrary to earlier estimates of 38-40pc crop area lost to floods, the latest situation was that sugarcane crop area dropped by just 2pc and sugarcane production declined by 25pc.

Both major producers and stakeholders — Punjab and Sindh — recommended initial export of 100,000 tonnes subject to PSMA’s guarantee that there would be no shortage or price hike in the domestic market and there would be no subsidy involved.

The Ministry of National Food Security & Research (MNFSR) reported that the SAB led by Food Minister Tariq Bashir Cheema on Wednesday reviewed the data provided by FBR, PSMA and provinces relating to sugar stocks for 2021-22 and production estimates for 2022-23 and local the domestic requirement.

It also reported that the Prime Minister’s Office (PMO) ordered early this month to engage an audit firm of international repute to confirm stocks before allowing exports — sugar price being a politically sensitive subject — but a reputable firm showed no interest on a pro bono basis.

Therefore, SAB decided to request the prime minister to reconsider its decision for an “independent audit” as it takes considerable time and reliance for the decision should be based on data provided and authenticated by the FBR chairman. The PMO has not responded yet.

The SAB and then MNFSR, in the meanwhile, asked the ECC to allow the export of 100,000 tonnes of sugar as supported by Punjab and Sindh through quota to be distributed among the tax return filer millers with the PSMA’s undertaking that the existing ex-mill price of Rs85-90 per kg will not increase till Jan 31, 2023. Otherwise, sugar export to discontinue.

Supplementary grants

The ECC also approved two Technical Supplementary Grants including Rs7m to the Ministry of Climate Change to set up an audio-video centre for online participation in international climate change events and local meetings and Rs743.57m for the Ministry of Housing and Works for the execution of its development schemes.

Published in Dawn, December 16th, 2022

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