Millers seek support to get stocks released from banks

Reject finance minister’s call for a probe into the commodity’s price

ISLAMABAD: A representative body of sugar millers, while rejecting the finance minister’s statement for a probe into the rising sugar prices, has sought remedial steps to bail out the industry as its entire stock is pledged with banks against borrowing.

PSMA spokesperson, in a statement, asked the finance minister to also consider the cost of sugar production before seeking the price probe. At the current price level due to a glut-like situation, it was impossible to get the stocks released from banks and supply the commodity to customers, he said.



He argued that following restrictions on exports, prices touched the lowest level because of over-supply in the market. “Prices declined to Rs45 to Rs46 per kg, which could never be considered a benchmark,” he said.

The spokesperson claimed that the federal government had itself fixed Rs60 per kg as the assessable price of sugar, which meant that the sale price should be Rs66 per kg including sales tax.

He pointed out that the sugarcane price was fixed by provincial governments whereas the sugar price was left at the mercy of market forces. The federal government, he said, had failed to support sugar exports, though the country was in dire need of foreign exchange and a huge amount was payable to the growers.

The spokesperson decried that despite surplus the federal government allowed exports of only 425,000 tons when prices were high in the international market. In this situation, “the industry could have easily disposed of the commodity without seeking any rebate.”

Now after about three months and recommendation of the Sugar Advisory Board to allow export of 1.2 million tons, only shipment of 300,000 tons was allowed by the Economic Coordination Committee and that too without any rebate, he said.

He asked the government to offer the incentive of rebate as prices in the international market had come down to $380 per ton.



“We are heading towards another bumper year and foresee that the sugar industry will not be able to pay to the growers in the absence of a coherent export policy,” the spokesperson said.

Published in The Express Tribune, August 10^th, 2017.

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