Price instability feared: ECC members disagree with bulk sugar export proposal
Dar argues export quota already allocated has not been fully utilised yet
The Ministry of Commerce should have taken into consideration two critical factors - price stability in the domestic market and keeping strategic sugar reserves - before sending the proposal for further export. PHOTO: FILE
ISLAMABAD:
Members of the Economic Coordination Committee (ECC) have snubbed the Ministry of Commerce for pressing the case of bulk sugar export at a time when already allocated sugar export quota has not been fully utilised.
The ECC members expressed fears that permission for bulk sugar export would cause price instability in the domestic market. The issue was taken up in a meeting held on July 18.
During the huddle, the Ministry of Commerce tabled a summary, seeking ECC’s approval for export of 600,000 tons of sugar in addition to the quantity already permitted for shipment.
According to an inter-ministerial committee, out of the 0.425 million tons already allowed for export by the ECC, the State Bank of Pakistan (SBP) had so far allocated 0.39 million tons, of which around 0.348 million tons were exported by the end of May 2017.
ECC Chairman Ishaq Dar, who is also the finance minister, noted that a considerable quantity of sugar, out of the already allocated quota, was still left to be exported. Keeping this in view, he said, any decision allowing export of an additional 0.6 million tons in bulk would not prove to be prudent as it might jack up sugar prices in the domestic market.
He suggested that the Ministry of Commerce should have taken into consideration two critical factors - price stability in the domestic market and keeping strategic sugar reserves - before sending the proposal for further export.
He was of the view that the ECC should first allow export of only 0.3 million tons instead of the proposed 0.6 million tons. “If there is a need for more exports, the Ministry of Commerce may submit a proposal after review of the commodity’s stock and exports as well as price situation in the country by a committee constituted by the prime minister,” he said.
Ministers of planning, development and reform, petroleum and natural resources and national food security and research endorsed views of the ECC chairman.
The Ministry of Commerce made the export recommendation after the Pakistan Sugar Mills Association (PSMA) approached and told the ministry that mills across the country had produced a record volume, resulting in a surplus of 1.475 million tons that caused delay in payments to sugarcane growers.
PSMA suggested that a meeting of the Sugar Advisory Board might be called to review the overall stock availability and pave the way for further exports. These proposals were discussed in a meeting of the inter-ministerial committee on May 25.
On recommendations of the committee, the ECC insisted in its meeting on June 7 that decision on more sugar exports may be put off till the last week of Ramazan falling in the latter half of June in order to maintain price stability during the month.
Apart from this, the PSMA may be asked to express its firm resolve in writing to help keep prices stable in the domestic market, as agreed by the Sugar Advisory Board.
Published in The Express Tribune, July 22nd, 2017.
Members of the Economic Coordination Committee (ECC) have snubbed the Ministry of Commerce for pressing the case of bulk sugar export at a time when already allocated sugar export quota has not been fully utilised.
The ECC members expressed fears that permission for bulk sugar export would cause price instability in the domestic market. The issue was taken up in a meeting held on July 18.
During the huddle, the Ministry of Commerce tabled a summary, seeking ECC’s approval for export of 600,000 tons of sugar in addition to the quantity already permitted for shipment.
According to an inter-ministerial committee, out of the 0.425 million tons already allowed for export by the ECC, the State Bank of Pakistan (SBP) had so far allocated 0.39 million tons, of which around 0.348 million tons were exported by the end of May 2017.
ECC Chairman Ishaq Dar, who is also the finance minister, noted that a considerable quantity of sugar, out of the already allocated quota, was still left to be exported. Keeping this in view, he said, any decision allowing export of an additional 0.6 million tons in bulk would not prove to be prudent as it might jack up sugar prices in the domestic market.
He suggested that the Ministry of Commerce should have taken into consideration two critical factors - price stability in the domestic market and keeping strategic sugar reserves - before sending the proposal for further export.
He was of the view that the ECC should first allow export of only 0.3 million tons instead of the proposed 0.6 million tons. “If there is a need for more exports, the Ministry of Commerce may submit a proposal after review of the commodity’s stock and exports as well as price situation in the country by a committee constituted by the prime minister,” he said.
Ministers of planning, development and reform, petroleum and natural resources and national food security and research endorsed views of the ECC chairman.
The Ministry of Commerce made the export recommendation after the Pakistan Sugar Mills Association (PSMA) approached and told the ministry that mills across the country had produced a record volume, resulting in a surplus of 1.475 million tons that caused delay in payments to sugarcane growers.
PSMA suggested that a meeting of the Sugar Advisory Board might be called to review the overall stock availability and pave the way for further exports. These proposals were discussed in a meeting of the inter-ministerial committee on May 25.
On recommendations of the committee, the ECC insisted in its meeting on June 7 that decision on more sugar exports may be put off till the last week of Ramazan falling in the latter half of June in order to maintain price stability during the month.
Apart from this, the PSMA may be asked to express its firm resolve in writing to help keep prices stable in the domestic market, as agreed by the Sugar Advisory Board.
Published in The Express Tribune, July 22nd, 2017.