LAHORE, June 15: The Pakistan Sugar Mills Association (PSMA) has offered to sell its stocks to the government at the price at which sugar is being imported to end the crisis believed to have been created largely by hoarders.

In an extra-ordinary meeting held on Thursday, PSMA members noted that the State Bank of Pakistan had recently directed banks to withdraw working capital loans from the sugar industry up to July 31, 2006.

Sources said the SBP directives were issued following press statements of millers that they had run out stock.

Prime Minister Shaukat Aziz also told newsmen that banks would not issue loans to hoarders.

(Answering a question at a press conference in Islamabad, the prime minister said the government had decided that income tax returns of all sugar mills would now be reviewed and the previous policy of reviewing the income tax returns of only a couple of sugar mills on a random basis would be abandoned.)

Criticising the SBP directives, PSMA members said it should not be forgotten that while sugar was produced in three months, it was sold all year long. They said the country’s total sugar consumption per month was not more than 325,000 tons, out of which around 100,000 tons were supplied to the market through the Utility Stores Corporation and the rest of the quantity was supplied by 78 sugar mills.

“How can the industry offload its stocks in such a situation before July 31?” they said. “Therefore the industry has decided to offer to the government its stocks at the price at which imported sugar is landing in all four provinces,” they explained.

The participants of the meeting expressed concern over what they described as the industry’s “media trial” by both the government and the opposition. They said their offer would put an end to the “politicisation” of the sugar crisis, adding that the industry would no longer be criticised for hoarding and manipulation of sugar prices.

Commenting on the offer, a city trader said it proved that the industry was indeed holding sufficient stocks to clear huge debts. “This is exactly what the government has been claiming and the industry has been denying all this while. The industry stopped printing its stock position in January. And now when pressure has been exerted on them, they are offering to sell their stocks to the government at sugar’s import price. But this is extremely unfair. All this sugar has been produced in Pakistan and there is no reason why the government should buy it at higher prices,” he said.

Another dealer recalled that the PSMA was selling sugar at higher prices when international prices were low. “And it wants to sell sugar to the government at the import price when international prices are higher than domestic prices. The industry has always been protected by the government at the cost of consumers. Little wonder, then, that it again wants to enjoy unfair official protection,” he said.

An official of the food department said the demand for sugar’s import price was unfair because it included loading/ unloading charges, incidental charges and an insurance cover.

In Islamabad, the prime minister in his press talk on Thursday told newsmen that the government had been able to resolve to a great extent the issue of sugar, cement and pulses’ prices by taking remedial measures at all stages.