Sugar stocks: Millers cite unverified data to win approval for exports

Have got Rs10b export subsidy during the rule of current government

ISLAMABAD: In a development that caught many unawares, it emerged in a meeting of the Economic Coordination Committee (ECC) that sugarcane commissioners and sugar millers were quoting unauthenticated stock figures to win approval for export of the sweetener and get billions of rupees in subsidy.

The current government had doled out over Rs10-billion subsidy on sugar exports, which went into the pockets of industry barons. Now, the ECC has got to know that the stock position cited by the cane commissioners was based on the data provided by the mill owners and it did not portray a true picture.



Special Assistant to the Prime Minister on Revenue Haroon Akhtar Khan raised the issue in the ECC huddle on September 23. He suggested that the existing mechanism for determining sugar stock levels through the office of cane commissioner should be reviewed.



The industries and production secretary acknowledged that some complaints had been made about the sugar stock data. However, he insisted that the cane commissioner office was overall effective.

He said he would meet the Pakistan Sugar Mills Association (PSMA) - a lobby group of the millers - to remove anomalies pertaining to the stock data provided to the cane commissioners.

PSMA leader Sikandar Khan said they had been giving estimates only, but later they stopped quoting figures after the Competition Commission of Pakistan accused the millers of forming a cartel.

Meeting participants told the ECC that sugar stock in the country stood at 2.57 million tons on September 7, 2016. The commodity would be in surplus after the arrival of new crop and there was great potential for exports after keeping strategic reserves.

The committee was of the view that if sugar export was considered for approval, the quantity should not be more than 0.25 million tons for a single phase. Following that, the ministry concerned should again approach the ECC to seek fresh approval for the next phase of shipments overseas.



During the rule of the present government, the sugar millers have fetched billions of rupees through exports. However, miseries of farmers have gone up with delay in payments by the millers, which is the reason behind negative growth in the sugar sector in the last financial year.

Apart from this, the consumers have also suffered in the wake of sugar exports as prices of the commodity have increased in the domestic market. The only gainers were the millers who have got both higher prices from local consumers and lucrative subsidy on exports.

Published in The Express Tribune, September 29^th, 2016.

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