Govt plans third party audit to assess surplus sugar stocks

LAHORE: Federal government and Pakistan Sugar Mills Association (PSMA) have agreed to conduct third-party audit of sugar stocks available with manufacturers, industry officials said on Thursday.

Both sides managed to largely resolve various issues in a meeting between the PSMA and the Federal Minister for National Food Security on Thursday.

PSMA Chairman Asim Ghani Usman said the meeting was held in a very positive atmosphere. Federal Minister for National Food Security and Research Tariq Bashir Cheema said that the government has yet not granted permission to export sugar. However, he said “a mechanism was being evolved for ascertaining quantum of sugar stock available with mills.”

Ghani, on the other hand said after the meeting that mills would submit sugar stock data for third-party audit in three days, while audit firm would verify it in a week.

According to the government’s stance, this step was necessary before making the final decision regarding the exports.

PSMA, Punjab Chairman Zaka Ashraf said that sugar mills in Khyber Pakhtunkhwa, Sindh and Punjab were waiting for the decision of the federal government regarding the exports. He was of the view that sugar mills were facing serious challenges in making payments worth billions to the banks.

Talking about the cost of production, he said that the current price of sugar was Rs85/kg in the local market, while the manufacturing cost stood at Rs115/kg, especially if new support price was factored in.

“The sugar industry is likely to face loss of Rs100 million on a daily basis due to cost difference,” Ashraf added.

For the past several months, sugar mills have been pitching the demand to allow sugar export. As per the mills, there were ample surplus stocks of sugar available in the country to the tune of 1.2 million tonnes, said a spokesperson of the PSMA.

The sugar industry has constantly been appealing to the government to allow them to export the surplus sugar so that the new working capital could be provided by the banks for the new crushing season. PSMA spokesperson said that India so far exported six million tonnes of sugar and converted the remaining into ethanol to save foreign exchange. Other sugar-producing countries have also been exporting their sugar after meeting their domestic demand. However, they lamented that free trade was not being promoted in Pakistan. “If the government does not give timely permission to export of this surplus sugar, it will directly affect payment to the growers and will affect the timely start of the crushing season,” they reminded. If the sugar mills could not get the required quantity of sugarcane for crushing, they would be unable to make sufficient amount of sugar to meet the demand of domestic consumers, which would force the government to import the commodity.