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April 17, 2021

Millers-govt faceoff over sugar price, supply continues unabated

Business

April 17, 2021

LAHORE: A tug-of-war between powerful sugar millers association and Punjab Food Department over the price of the sweetener continues unabatedly as no side is ready to surrender.

On Friday, Pakistan Sugar Mills Association (PSMA) Punjab showed its concern on the assertion of Cane Commissioner Punjab, a senior official of provincial Food Department regarding price of commodity.

The statement was issued on Cane Commissioner’s contradiction regarding allegation by the sugar body that ex-mill price of Rs80/kg was very low and the sugar mills were facing losses. He made it clear the sugar mills themselves filed average sale price of Rs67/kg with the tax authorities.

“If sales tax was added to the sale price, filed by the mills themselves, the ex-mill price comes to Rs78.39 per kg,” the cane commissioner added. He said the ex-mill price of Rs80/kg had been calculated using the data provided by the sugar mills themselves.

The sugar mills could not retract their financial statements the containing sale price of sugar, he opined.

The ex-mill price determined by the government stood the test of judicial review in a recent hearing by the Lahore High Court.

The court allowed obtaining 155,000 metric tons (MT) of sugar for the month of Ramazan. Out of that, 30,000MT sugar was being sold in Ramazan bazaars at the subsidised rate of Rs65/kg, the cane commissioner added.

PSMA on Friday insisted there had been no consultation with Cane Commissioner Punjab regarding price of sugar.

“Only one meeting was held under the Chairmanship of Chief Secretary Punjab, wherein provision of 20,000 tons of sugar on reduced rate was discussed. This sugar was to be provided for the lower strata of the society,” a PSMA spokesperson said.

“This is an old tradition and PSMA provides sugar by giving concession of Rs8/kg on the current market price.” He said nothing could be finalised in that meeting also and subsequently no meeting was held. “Cost of sugar at Rs67/kg as stated by Cane Commissioner is totally baseless,” the PSMA representative said.

“We have been reminding the government in the past, time and again, that prices of sugarcane are rising, but government did not pay any attention,” he added.

As much as 80 percent of the cost of sugar was the sugarcane cost, the PSMA official said adding that now that the cost of sugar had tremendously increased, the government was forcing the mills to sell it at lower price of Rs80/kg. He said the way government was dealing with the crisis it would have a highly negative impact on the industry.

“Under the present arrangement and court order, the sugar mills have to provide 155,000 tons of sugar at Rs80/kg, meant for the lower strata of the society.”

But the stores other than that were also not allowed to sell sugar at the routine market rate, the PSMA spokesperson said and added that those shopkeepers were arrested and fined heavily, while their sugar was also confiscated.

“Due to these factors sugar has disappeared from the market. When sugar is not there in the market, how will it be available to the people? Dealers and people associated with this business are scared and are not inclined to continue the business.” PSMA spokesperson further said the government should allow maximum dealers to lift sugar from the mills and distribute to all the stores, shops and outlets at routine market rates, so that sugar was available in abundance in the market.

“Without such arrangement, the crisis will become severer and severer.”

The government should take stock of this situation, take corrective measures, and ensure the availability of sugar at reasonable rates and in adequate quantity, he stressed. Meanwhile, in his rejoinder on Friday, Cane Commissioner said he stood by his statement that the sugar mills submitted average sale price of sugar of Rs67/kg to tax authorities, which was inclusive of their profit but not Sales Tax. “If Sales Tax is added, the sale price or ex-mill price of sugar comes to Rs78.39/kg,” he said.

As regards purchase of sugar by commercial and industrial users, there was no restriction on it nor does the rate of Rs80/kg apply on such sales by the mills.

“However, it is made clear that 155,000 metric ton sugar, allowed by the Lahore High Court is only meant for the domestic consumers and if anyone is found selling it to the industrial or commercial users such as bakeries, sweet shops, ice cream manufacturers, hotels etc, stern action would be taken against him,” the cane commissioner maintained.