ECC approves 225,000 tons of sugar export from surplus stocks

Withholding tax rate of 0.4pc on non-filers  extended till March 2017

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday approved export of 225,000  tons of sugar, spurred by an expected surplus of more than one million tons in the current production year.

“The ECC decided to allow export of 225,000 MT of sugar from the surplus available after ascertaining that there would be 1.23 million metric tons of surplus sugar available in the country,” a government statement said.

Finance Minister Ishaq Dar chaired the ECC meeting held at the Prime Minister's Secretariat. However the ECC also directed the ministry of commerce to ensure ‘adequate checks and balances available to maintain the price stability in the domestic market at the current level.”

“In case the domestic price stability is disturbed, the commerce ministry would bring a summary to consider cancelling the export permission to sugar exporters,” the statement added.

The government, however, has refused to provide any export rebate to the traders for overseas sales. “Unlike previous years, it was decided that there will be no freight/export rebate payable by the government to sugar exporters on such exports,” it said.

“Furthermore, only those mills will be allowed to export which have cleared outstanding dues of farmers relating to the last season and have started crushing at full capacity.”  Industry officials said the Pakistan Sugar Mills Association (PSMA) had sought permission to export 500,000 tons of sugar by March 31, 2017.

Millers are expected to produce 5.5 million tons in the current season and the total inventories are likely to climb to 6.7 million tons. The country has been producing more sugar than it needs for the past four years and the trend is likely to continue.

The country consumes five million tons of sugar a year, thus could easily export over one million tons this season even after stocking up for emergencies, they said.

The ECC also approved the proposal of petroleum ministry regarding allocation of additional 50 MMCFD available gas from Habib Rahi Limestone (HRL) reservoir to Thermal Power Station Guddu (TPSG/GENCO-II) “subject to installation of compression plant by TPSG/GENCO-II and allocation of additional upto 26 MMCFD available gas from HRL reservoir to Engro Fertilizer Ltd’s old plant for continuation of the plant.”

The meeting recommended the proposal of the Federal Board of Revenue for “extension of the period of applicability of existing reduced withholding tax rate of 0.4 percent for non-filers of income tax returns from 1st January 2017 to 31st March 2017.” The statement said the finance division apprised the ECC that the State Bank of Pakistan’s (SBP) principal debt amounting Rs54.460 billion outstanding against Zarai Taraqiati Bank Limited (ZTBL), as on December 31, 2015, is being converted into redeemable preference shares carrying a profit of 7.5 percent per annum, redeemable in 10 years in one bullet payment on December 31, 2025.

“In this regard, the ECC approved issuance of guarantee of Rs54.460 billion by the government of Pakistan in favour of SBP for principal debt of the preference shares and returns thereon.”