ECC allows more sugar export despite price rise

Earlier, millers missed the March-end deadline for shipments

ISLAMABAD: The government, while caving in to the pressure from sugar millers, has allowed further export of the sweetener, though domestic consumers are feeling the pinch of rising prices.

Since the approval of sugar exports, market forces have been pushing prices up in the domestic market.



The Economic Coordination Committee (ECC) of the cabinet, in its meeting held in December last year, had permitted sugar exports on the condition that they could be stopped if prices in the local market started rising.

It set the export quantity at 225,000 tons, which would be shipped by the end of March 2017 with the condition that prices in the country would be kept at the level of December 15, 2016 at Rs62.61 per kg.

If prices rose, an inter-ministerial committee, constituted by the prime minister, would recommend to the ECC to stop further exports.

Later, the ECC in its meeting held on March 28 was informed that sugar prices had gone up following the export decision in December.

Sugar exporters had also missed the deadline of March-end and shipped only 37% of the agreed quota. However, the ECC permitted further exports of 200,000 tons.

The quantity was lower than the 500,000 tons demanded by the millers whereas the Sugar Advisory Board had recommended 400,000 tons.

Earlier, the committee reviewed domestic prices in meetings held on January 11, 2017 and February 9, 2017 and noted only 2-3% price fluctuation since December 15, 2016, which did not warrant any intervention.

The Ministry of Commerce, quoting the Federal Board of Revenue (FBR) data, said 85,000 tons of sugar had been exported, accounting for 37.77% of the export quota allowed by the ECC.

The Pakistan Sugar Mills Association requested for an extension in the deadline from March 31 to May 31, 2017 due to closure of Pakistan-Afghan border.



According to SAB, the country would have total stocks of 7.195 million tons of sugar, of which 5.525 million tons will be consumed over 13 months.

After keeping 630,000 tons as strategic reserves for 45 days and deducting 225,000 tons, which were allowed for exports in December, the total offtake would be 6.38 million tons. This will leave a surplus of over 800,000 tons.

Published in The Express Tribune, April 5^th, 2017.

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