Export of sugar

The Economic Coordination Committee (ECC) of the Cabinet in its meeting held under the chairmanship of Federal Minister for Finance has approved the export of 0.3 million tonnes of sugar against the demand of 0.6 million tonnes. The decision was taken to allow the export under certain conditions to avoid the escalation of prices of sugar in the domestic market. The export of 0.3 million tonnes of sugar will be in addition to the quantities already allowed for export by the ECC. According to some media reports, the Pakistan Sugar Mills Association (PSMA), in May 2017 had informed the government that the sugar industry had produced record quantity of sugar leading to a surplus of 1.475 million metric tonnes which was resulting in the delayed payment to the sugarcane growers. The association requested that the Sugar Advisory Board should consider allowing the export of sugar. At present, sugar mills owe almost Rs25 billion to sugarcane growers. The mill owners are unable to pay the due amount because of the financial crunch faced by the industry and its poor liquidity position.

In view of the above, there is a strong need to overview the sugar stock situation and accordingly enhance the export quota. This will facilitate the mills to pay farmers’ outstanding dues and commence the 2017-18 crushing season on time. This will also bring the much needed foreign exchange to the country and reduce its trade deficit.

Khan Faraz (Peshawar)