LAHORE: Punjab will pay the cost of costlier imported sugar to the tune of over Rs1.52 billion as the federal government ordered it to directly lift 150,000 out of 200,000 metric tonne sugar from port. Overall subsidy on the imported sugar would be Rs4.35 billion shared by the federal, Punjab and KP governments.
However, Punjab did not give any demand of the imported sugar due to availability of sufficient locally produced sugar at the start of the next sugarcane crushing season.
Federal Finance Minister Shaukat Tarin issued instruction to the Punjab and KP to lift the imported sugar directly from the port through dealers’ network. The province will make agreements with the dealers as they did last year for the distribution of the imported sugar in their respective provinces. According to meeting minutes, a copy no: 1(18)/2021/CA, of which was available with The News, the landed cost of the imported sugar is approximately US $637.10 metric tonne which was estimated at Rs109/kg at exchange rate of Rs167/one dollar. “The differential between the cost of the sugar including the dealers’ margin is approximately Rs119at the exchange rate of Rs167 and sugar price in the market is the subsidy portion, and this subsidy will be shared between the federal government and provincial governments with formula of 50 percent federal government, 35 percent Punjab government and 15 percent KP government,” the documents revealed.
Interestingly, Punjab has refused to get any quantity of imported sugar as the province has sufficient locally produced sugar available till the start of the next crushing season which is due in the first to second week of November. According to the Punjab Food Department data, available sugar stock in the province is around 390,000 metric tonne with the sugar mills. Further, some around 20,000 to 25000 metric tonne sugar quantity exists in market supply chain. The monthly consumption of sugar in Punjab is around 250,000 metric tonne and KP is 50,000 metric tonne. The document revealed that Federal Secretary for Ministry of Industries and Production Jawad Rafique Malik (previously holding position of chief secretary Punjab when the MoIP sent letter to provide the demand of imported sugar to the provinces) stated that “so far provinces have not shown any demand for sugar in spite of the repeated reminder of this division, only KP in their letter dated 6.9.21 stated that they are left with sugar for only 16 days. Moreover, storage of sugar in Pipri godown of the TCP is not feasible as the condition of godowns is bad, making penetration of moisture in sugar making it unfit for consumption. Hence, the expensive option of private godowns needs to be explored”.
Despite this fact, the secretary MoIP presented a clear stance of the Punjab province, the federal finance minister directed that “since Punjab is supplying sugar to sugar-deficient provinces/ areas ie KP, AJK, GB and ICT, hence Punjab should lift 150,000 metric tonne sugar directly from the port”. Interestingly, according to the minutes, Sindh and Balochistan sugar stocks and requirements were not discussed. Further, for making the government interventions of importing sugar for domestic consumers successful, it was directed that this imported sugar (200,000 tonne) sugar would be sold at the government controlled rate of Rs90/kg at the government controlled markets like Sasta Bazaar, Sahulat Bazaars, Sunday markets or Utility Stores, so that the price differential of this intervention should be maintained and only domestic consumers are beneficiaries (and not the industrial consumers”.
According to the details, the expected time of arrival of the imported sugar is as four consignments of carrying 30,000MT each is one arrived on September 22, other September 29, October 5 and 12 while three consignments carrying 25,000MT each will arrive on October 12, 19 and November 2, respectively. Questions were sent to Punjab Finance Department about how much additional subsidy will be required for 150000 metric tonne imported sugar to sell it lower than current market price but the department did not respond in two days.
Further, an official of the Punjab Food Department said the government will manage the subsidy. He admitted that Punjab has sufficient sugar stocks but being the government, it has to look after the interests of the public. The people living in ICT, AJK, KP and GB are also Pakistanis. However, he said subsidised imported sugar will be sold in Punjab.