Govt allocates sugar export quota to defaulter mills

ISLAMABAD: The federal government has allocated sugar export quota to mills that have defaulted on billions of rupees.

According to Profit’s sources, nine sugar mills of top political families have defaulted worth Rs 12.27 billion. This includes Abdullah Shah Ghazi sugar mill which is defaulting at Rs 2.11 billion, Haq Bahu Sugar mill at Rs2.2 billion, Macca Sugar mill Rs 926 million, Abdullah Sugar mill Depalpur Rs200.7 million, Abdullah Sugar mill at Rs 1.678 billion, Haseeb Waqas Rs 384 million, Seri Sugar mill Rs 608 million, TMK Sugar mill Rs 2.064 billion and Tandlianwala Sugar mill Rs 2.044 billion.

These sugar mills have failed to supply committed quantities of sugar despite getting 100% advance payments. 

Recently, the Trading Corporation of Pakistan (TCP) raised concern to the Economic Coordination Committee (ECC) on this matter.

“There are almost 9 sugar mills against whom TCP  has an outstanding liability of around Rs 12.27 billion and the cases are subjudice at various courts of law because the respective sugar mills have defaulted in supply of committed quantities of sugar despite getting 100% advance payments” read the agenda presented on January 3, 2023 to ECC. 

Sources said that through the Ministry of Commerce, TCP also requested ECC to not allow trading to any of the referred sugar mills. TCP also stressed that sugar export quota should be availed only when their total outstanding liability including accrued markup towards the government of Pakistan stands settled.

However the ECC under the chair of Finance Minister Ishaq Dar and the federal cabinet has not paid heed to such a proposal, sources added.

On January 11, 2023, ECC allowed 250,000 metric tons of sugar export and directed the provincial Cane Commissioners to allocate quota for export of sugar within seven working days: 61% to Punjab, 32% to Sindh and 7% to KPK. 

The Cane Commissioner’s allocation of Punjab included 3325 metric ton to Tandlianwala Sugar mill, 512 metric ton to Macca Sugar Mills and 1947 metric ton sugar quota to Abdullah Sugar mill. 

According to the Pakistan Bureau of Statistics, the sugar price was recorded at Rs 92 per kg on January 12, 2023 which has now reached Rs 110 per kg. According to one official, ECC had directed relevant ministries to keep eye on sugar prices and there are reports that sugar is also being smuggled to neighbouring countries.

Sources said that the sugar price will increase in the next few days as sugar production during the current season remained 4.4 million tons due to which the total stock recorded 5 million tons. This stock is almost 1 million tons less than last year’s.