ISLAMABAD: The sugar industry has asked the government for more export of 850,000 tonnes sugar to fetch $485 million as country have a surplus of 3.2 million tonnes of sugar in stock.
The sugar industry has already been allowed to export 150,000 tonnes sugar valuing $90 million keeping in view bumper sugarcane crop.
The industry mentioned in its August 1, 2024 communication to Commerce Minister the cost of sugar has increased by Rs17.70 per kg because of new taxes. It explained FED has been levied at the rate of Rs15 per kg on supply of sugar by any person to a manufacturer, processing or packaging entity.
Moreover, additional impact on account of Sales Tax at the rate of Rs2.7O per kg has resulted in a total increase in sugar price of Rs17.70 per kg.
Pakistan Sugar Mills Association (PSMA) said ECC of the Cabinet had allowed export of 150,000 tons of sugar (export value $90 million) with the condition exporters shall ensure consignment is shipped within 45 days of quota allocation by the cane commissioner of each province. However, 16 days were lost in correspondence between Ministry of Industries and Production and FBR for unblocking of HS code for sugar export since allocation of quota by cane commissioner Punjab on July 1, 2024.
The export process started from July 16, 2024. The industry demanded sugar consignment should be shipped within 60 days from the date of allocation of export quota instead of 45 days.
The industry asked for approval of 15 days more extension for first export permission of 150,000 tonnes of sugar.
The industry, while seeking second export permission, argued 1.2 million tonnes surplus sugar stock was available as of July 15, 2024. The stock will increase by the end of November to 1.5 million tonnes.
The industry requested to allow them another tranche of 500,000 tonnes of sugar (export value $275 million) for export on the same terms and conditions except some changes. The changes include: i) shipment is ensured within 60 days from the date of allocation of export quota; ii) permission of sugar export through LCs as was done in the previous years.
Export proceeds shall be received either in advance through banking channels or within a period of 60 days of opening of LCs for export of sugar. It requested the State Bank of Pakistan (SBP) to advise all banks to accept export proceeds from 3rd parties for export to Afghanistan. Ex-mill local sugar price benchmark may be increased to Rs150 per kg for 2nd tranche of sugar export due to increase in Withholding Income Tax from 0.20pc to 2pc with net impact of Rs2.52 per kg, it said. The industry also sought third export permission from the government, arguing the country has a bumper sugarcane crop for the crushing season 2024-25. Sugar production of 7.5 to 8.0 million tonnes is expected creating another surplus of 1.5 to 2 million tons. Another permission for sugar export of 350,000 tonnes (export value of almost $210 million) must be planned for September 2024 to take care of 2/3rd of the expected surplus sugar stock of 1.5 million tonnes by end of November.
