Sugar board delays export decision, seeks current stock data

ISLAMABAD: Sugar Advisory Board (SAB) on Tuesday asked the provincial cane commissioners to submit sugar data and production estimates of for the current season so it can take a decision on allowing the export of the sweetener.

SAB, a federal tripartite recommendation body, has yet not take a decision on sugar export and would wait for the report from the cane commissioners. The newly re-constituted SAB that comprises of members from the federal government, provincial governments, and sugar industry/growers/associations met with Federal Minister Tariq Bashir Cheema in the chair to discuss and know the real sugar stocks in the country and the expected sugar production.

An official who attended the meeting told The News, “the board has taken no decision on the sugar exports, however, asked the provinces to provide data on sugar stocks and estimated sugar production in the new season.”

It should be noted that sugar millers have been lobbying for the last few months to seek permission from the government to export sugar, despite there being doubt about the volume of the available stocks reported to the government.

Besides, the sugar millers have also delayed the cane-crushing season which normally commences in the first half of November. Sugar mills partially started cane crushing a few days ago. Punjab houses the majority of sugar mills.

Earlier, Pakistan Sugar Mills Association (PSMA) had threatened it would not start crushing until the government allowed to export 1.2 million tonnes of the commodity. The sugar industry claimed that it could earn half a billion dollars if allowed to export the sweetener.

The government relies solely on the stock figures provided by the sugar mills and has no access to audit the stocks before taking a decision regarding exports. In the absence of an audit mechanism, the government normally gets tricked and the general public faces the brunt in the form of high prices.

Last week, the wholesalers and retailers held a meeting in Lahore, which also cast doubt on the sugar stock. According to the meeting, if the government allows sugar exports, the price of the commodity would go beyond Rs125/kg from the existing price of Rs95 to 100/kg.

The official said that the previous PTI government’s sugar export and then import episode could be repeated and sugar millers could mint billions if that happens. He alleged that the millers gained two-way benefits. “They gained multibillion rupees as subsidies from the government on exports and profit from increasing prices in the local market,” he added.

The official said that since sugar has become a politically sensitive subject, the government should take the decision very carefully, as already sugarcane production was expected to be lower than last year due to devastating floods in southern Punjab and Sindh.

Sugar Inquiry Committee’s report 2020 is also worth noting here, as it gave damning evidence about sugar price fixing and faked exports to avail rebates on sales taxes. According to sources, the report mentioned in depth how the amount of sugar exported to Afghanistan was routinely inflated to show as if 75 tonnes of the commodity were being exported per truck.

However, this was barely possible, given that the maximum capacity of a truck, even when overloaded, does not exceed 30 tonnes. The scam also seemingly has another purpose: laundering money. If sugar is exported to Afghanistan, the payment should also be coming in from the same country. However, it was found by the commission that many sugar mill owners were receiving telegraphic transfers for payments for sugar sold to Afghanistan from the US and Dubai, therefore seemingly whitening money and earning dollars at the same time.

Another important finding highlighted in the report was that sugar mills paid an estimated Rs22 billion in taxes to the government of Pakistan, but out of that total amount, Rs12 billion was reclaimed in rebates. Hence, the net contribution was close to only around Rs10 billion. The PSMA had however rejected the report, terming it as “propaganda” and “one-sided”.