ECC allows export of 0.3 million tons of sugar

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet under chairmanship of Federal Minister for Finance Ishaq Dar on Tuesday approved export of 0.3 million tons of sugar against the demand of 0.6 million tons.

Keeping in view the fluid political situation in the country, the ECC took a cautious decision and allowed exports under certain condition in order to avoid escalation in prices of sweetener in the domestic market.

According to the summary forwarded by Secretary Commerce Younas Dagha before the ECC, the export of 0.3 million tons of sugar, in addition to the quantities already allowed for export by the ECC, may be allowed subject to the following conditions:

a) The committee constituted by the prime minister will meet during first week of every month to review the sugar stock/export and price situation; b) In case of any abnormal increase in the domestic price of sugar, the committee would recommend to the ECC the stoppage of further exports; c) The export quota will be approved and monitored by the State Bank of Pakistan (SBP) on first come first served basis; exports will be completed within 60 days of quota allocation by the SBP; d) Inter-Ministerial Committee will meet again to review the stock/export and price situation and recommend enhancement of export quantities, if deemed appropriate.

As the representatives of ministries of National Food Security & Research, Industries & Production and Finance were present during the meeting, their views are included in the above-mentioned recommendations. The ECC of the Cabinet vide its decision in case No ECC-154/27/2016 dated 28th December, 2016 allowed export of 0.25 million metric tonnes (MMT) of sugar.

In a subsequent decision in Case No ECC-28/9/2017 dated 28th March, 2017, the ECC allowed an additional export of 0.2 MMT of sugar up to 31-05-2017 subject to the condition that "in case domestic sugar price stability as compared to 15th December 2016, is not maintained, the Committee (constituted by the prime minister vide directive No. 3546/M/SPM/15 dated 25-11-2015) would immediately recommend to the ECC for stoppage of further exports" and that the "exports will be completed within sixty (60) days of allocation of quota or 31st May 2017, whichever comes earlier.”

Pakistan Sugar Mills Association vide their letter dated 6th May, 2017 approached the Ministry of Commerce stating that the sugar industry had produced a record quantity of sugar leading to a surplus of 1.475 MMT which was resulting in delayed payments to the sugarcane growers.

The PSMA requested that a meeting of the Sugar Advisery Board (SAB) might be convened to review the overall availability and stock position of sugar for allowing further exports. The SAB, in its meeting held in the Ministry of Industries & Production on 17th May, 2017, recommended allowing export of 1.2 MMT sugar in view of the available surplus. PSMA's request and the SAB's recommendations were discussed in the meeting of the Inter-Ministerial Committee (mentioned in Para 1 of this summary) held on 25-05-2017. On the recommendations of the Committee, the ECC in its decision dated 7th June, inter alia, decided that in order to maintain the price stability during Ramazan, the decision on allowing further exports of sugar may be deferred till the last week of Ramazan and that PSMA may be asked to express their "firm resolve in writing to maintain price stability" as agreed in SAB meeting dated 17-05-2017.

The Inter-Ministerial Committee reviewed the sugar supply and stock position in its meeting held on 20th June, 2017. The Committee was briefed that the price of sugar in the domestic market remained stable which has benefitted the consumer.

The price in the domestic market according to the Sensitive Price Index for the week ending 15th June, 2017 was 56.30 per kg which was 11.1% lower than the level of December 15, 2016 when the export of sugar was allowed by the ECC. The Committee also observed that out of the total quantity of 0.425 MMT allowed for export by the ECC, a total of 0.391 MMT sugar quota has, so far, been allocated by State Bank of Pakistan (SBP) and around 0.348 MMT has been exported.

The additional secretary of Ministry of Industries and Production informed the Committee that the PSMA has provided the assurance that the instructions of the government regarding price stability of sugar "will be adhered to in letter and spirit"

According to Finance Ministry’s announcement after the ECC meeting, the decision of allowing export of sugar has been taken keeping in view the recommendations of the Inter Ministerial Committee, constituted by the Prime minister, and the Sugar Advisery Board.