LAHORE
The sugar-makers fear that the sugar industry will not be able to pay the growers, in the absence of a coherent sugar export policy, as the country is heading towards another bumper crop year.
Reacting strongly for the proposed probe by Ishaq Dar regarding sugar prices, the Pakistan Sugar Mills Association (PSMA) has pointed out that sugar cane of Rs 45 – 46 per kg could never be considered a bench mark.
The sugar makers remarked that the glut-like situation in Pakistan besides the lack of permission for export of sugar contributed the prices to touch the lowest ebb, due to an oversupply in the market, resulting in the price decline.
Spokesman of PSMA clarified that the federal government has itself fixed an assessable price of sugar at Rs 60 per kg which means that sale price of sugar should be Rs 66 to retrieve a number of sales tax.
“It is important to note that sugarcane price is fixed by provincial governments and price of sugar is left at the mercy of market forces,” the spokesman said, adding that the federal government itself has failed to support the export of sugar while the country was in dire need of foreign exchange and when there was still a huge amount of growers payable.
The federal government, despite the fact that surplus quantity of sugar was available, allowed only 425,000 tonnes of sugar to be exported, when the price of sugar was high in the international market.
He said the industry could have easily disposed of without seeking any rebate. Now, after about three months time and recommendation of sugar advisory board to allow export of 1.2 million tons of sugar, only 300,000 tons of sugar were allowed by the economic coordination committee of the cabinet, and that too without rebate.
Now that the international market price is at a level of USD 380 per ton it is important to dispose of the surplus sugar with a rebate from the government in view of fixed price of sugarcane by the government.
The spokesman added that the federal finance minister should also ask for the cost of production of sugar mills before making any negative statement. He said that entire stock of sugar industry has been pledged with banks and at the current level of prices due to the glut-like situation it is impossible to de-pledge the stocks and deliver to the customers.
“We, therefore, seek remedial steps from the federal government instead of criticism by the federal finance minister,” the spokesman said.
