Islamabad: The federal government has given the Ministry of Industries and Production (MoI&P) the authority to take action against sugar mills if there is a sudden increase in sugar prices in the wholesale market, reported Business Recorder.
As per media report, the Industries and Production Division, through a summary dated August 22, 2024, informed the ECC that the SAB met on August 21, 2024. Presided over by the Federal Minister for Industries and Production, the meeting reviewed the sugar stocks for the crushing year 2023-24, as given by the provincial governments and the FBR.
The stakeholders present in the meeting concurred with the fact that, as of August 15, 2024, the sugar stock available was 2.773 million MT, while the total consumption for the past 8.5 months stood at 4.797 million MT. Similarly, the projected consumption in the next 3.5 months was to reach a preceeding consumption pattern of around 1.974 million MT.
Taking into account the sugar yet to be exported—0.055 million MT—and the potential export to Tajikistan of 0.040 million MT, the expected surplus sugar for the next year would be 0.704 million MT. After detailed discussions, it was agreed that even if 0.100 million MT were exported, the opening inventory for the 2024-25 cropping season would still be 0.604 million MT, which is higher than the one-month national consumption.
As a result, the SAB recommended allowing the additional export of 0.100 million MT of surplus sugar, with modifications to the terms and conditions set by the ECC in its June 13, 2024 decision. These modifications include extending the period for exporting sugar from 45 days to 60 days due to procedural delays, requiring export proceeds from Afghanistan to be received in advance through banking channels, and shifting the benchmark for export permission from retail to wholesale prices.
The SAB also recommended the deregulation of the sugar sector, formulation of an all-inclusive sugar policy, and demarcation of appropriate zoning for the sugarcane crop to fulfil national needs. It mentioned that the PBS dashboard would monitor prices on a day-to-day basis, as it was now providing daily wholesale and retail price updates.
It was also decided that the condition regarding the cancellation of export quota in case of failure to pay off dues to growers would be applied only to defaulting sugar mills and not to PSMA as an entity. The Industries and Production Division, on the other hand, was directed to monitor the situation daily and report back to the ECC regularly. In case of any major price rise witnessed, the violators would be taken to task immediately by cancelling their export permissions.
The ECC also instructed the Cabinet Committee on Monitoring Sugar Exports to review sugar stocks/prices regularly and in this regard, revised ToRs are to be ratified with effect from June 25, 2024, after issuing necessary notifications.
