Millers reject sugar import move, notified ex-factory price

LAHORE: Sugar mills rejected need of imports of sweetener with its production this year more than enough to meet domestic demand and the government’s ex-factory price without tax relief.

Addressing a press conference, representatives of Pakistan Sugar Mills Association (PSMA), Punjab said the government should waive 17 percent general sales tax on sugar if it wants to fix ex-mill rate of sweetener at Rs80 per kilogram. If the provincial government is still ben upon fixing the price, it pays salaries of mills’ staff, takes all responsibility of business including outstanding amount of farmers and other liabilities.

Waheed Chaudhry, spokesman of PSMA along with Javed Kayani, former chairman of PSMA urged the government to have a meeting with sugar manufactures to resolve issues pertaining to the commodity’s price and availability.

“We are not against the present government nor we intend to do anything adverse against the incumbent government,” Chaudhry said. “We expect from the authorities to let us run our business professionally. We expect a judicious approach from the government. The price of sugar is directly related to rate of sugarcane.” A committee led by adviser to the Prime Minister has yet to complete its work about determination of sugar price.

If government could withdraw sales tax on imported sugar to ensure its relatively cheap price, why same relaxation could not be given to locally produced commodity, they posed.

PSMA members said Punjab is expected to produce about 3.7 million tons of sugar this year while total production in the country is estimated at 5.5 to 5.6 million tons. The country needs 5.4 million tons of sugar for its needs. Therefore, there is no need to import sugar from abroad.

Economic Coordination Committee of the cabinet in January allowed private and public sectors to import 800,000 tons of sugar to bring down its prices and build up carryover stocks.

PSMA members said sugar mills have bought sugarcane worth Rs375-380 billion and 95 percent of sugarcane price has been paid to farmers while the remaining five percent will be paid after the sale of sugar stock. They said the opposition is accusing the sugar industry of having amassed Rs500 billion which was completely wrong. Moreover, there is a talk of sales tax amounting to Rs456 billion owed by sugar industry, they said. There are 42 sugar mills in the Punjab. Even if these mills are sold, government cannot get Rs456 billion.

Kayani said people are accused of supporting the speculation mafia but the Pakistan Sugar Mills Association had sent a letter to the Punjab government to take action against the speculators. If action is taken against the dealers, the supply chain will be affected. If a shopkeeper kept even two sacks, an FIR would be registered against them. Such tactics would always tend to alter supply chain and would not yield positive results, he observed.