ECC orders food ministry to check sugar smuggling, hoarding

Published August 29, 2023
Finance Minister Dr Shamshad chaired maiden meeting of the Economic Coordination Committee on Monday. — Photo courtesy PID
Finance Minister Dr Shamshad chaired maiden meeting of the Economic Coordination Committee on Monday. — Photo courtesy PID

ISLAMABAD: With an almost 77 per cent jump in sugar prices in about four months, the maiden meeting of the Economic Coordination Committee (ECC) of the Caretaker Cabinet on Monday asked the Ministry of National Food Security to coordinate with relevant agencies and authorities “to check smuggling and hoarding of sugar”.

The meeting of the ECC presided over by Finance Minister Dr Shamshad Akhtar was called for a single-point agenda “Cancellation of Export Quota of Sugar with Ban on Export of Sugar” but noted that a ban already existed with effect from Aug 10 under a previous decision of the ECC in June.

This was despite the fact that the meeting was informed that sugar stock was no more than 2.27 million tonnes in the country and Sindh government had already increased sugarcane price by 41pc over the previous year and the Lahore High Court had suspended on May 4 an order that fixed sugar price at Rs99 per kg and maintained status quo since then while prices went beyond Rs175 per kg in the market.

Ministry of National Food Security & Research (MNFSR) briefed the meeting about the production, stock position of sugar, consumption and rising prices of sugar in the market, and its impact on overall food inflation. “The ECC reviewed its previous decision regarding the export quota of sugar and after detailed discussion and deliberation, decided that in light of the previous decision of the ECC on the matter, the ban on export of sugar was already in place post August 10, 2023”, an official statement said adding that MNFSR was directed to prepare and submit regular reports on availability of sugar stocks, consumption, and pricing to the ECC in order to enable it to monitor the availability and pricing of this important commodity.

Sweetener prices have surged over 77pc in less than four months

The ECC also asked the Ministry of NFSR to provide the latest stock, availability and prices of Wheat immediately.

The MNFSR told the ECC that on the request of the sugar industry, the ECC had allowed the export of 250,000 million tonnes of sugar on Jan 11, 2023 based on undertaking given by the Pakistan Sugar Mills Association that sugar price “will not increase in the domestic market from Rs85-90 per kg (ex-mill) for 2021-22 stocks”. The sugar industry had argued that during the crushing season 2022 industry produced the highest-ever sugar of 8 million tonnes and Pakistan will have two months of sugar beyond its needs when the next crushing season starts in November. PSMA had also reported then that a bumper crop of sugarcane would further add to the surplus production of sugar.

In the month of April 2023, the price of sugar, an essential food commodity started increasing, even though the country had a carry-over stock of sugar at 0.99 million tonnes from the previous year (2021-22) and a bumper crop of sugarcane during the year 2022-23, the MNFSR said. “This continuous increase in price of the essential commodity compelled the MNFSR to fix the price of Sugar under the law” and the Sugar Advisory Board after consultations with all the stakeholders approved fixing of sugar price at Rs98.82/kg on April 17. Consequently, MNFSR fixed the price of white crystalline sugar at Rs98.82/kg on April 20, 2023 under “Price Control and Prevention of Profiteering and Hoarding Act – 1977. The decision was, however, “suspended by the Lahore High Court and status quo is maintained”.

The MNFSR said “the price of sugar is increasing continuously in the market, thus causing stress to low-income consumers and increasing the food inflation” and 2.27 million tonnes as of August 15 would hardly meet the domestic consumption requirements till the start of next crushing season. Simultaneously, Sindh government has increased the indicative price of sugarcane at Rs425/40 kg, up by 41pc over the last year.

Published in Dawn, August 29th, 2023

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