Sindh cabinet approves additional subsidy for sugar export

Published: December 5, 2017
An employee works inside a sugar mill. PHOTO: REUTERS

An employee works inside a sugar mill. PHOTO: REUTERS

KARACHI: In order to facilitate sugar cane crushing in the province, the Sindh Cabinet has decided to grant an additional subsidy of Rs9.3 per kilogramme (kg) for export of surplus sugar.

This decision was made during a cabinet meeting presided over by Chief Minister Murad Ali Shah at the Sindh Secretariat on Monday. The meeting was attended by provincial ministers, advisers, special assistants, the chief secretary and concerned secretaries.

The agriculture department informed the cabinet that the Pakistan Sugar Mills Association has requested a subsidy in the export of sugar. Agriculture Minister Sohail Anwar Siyal told the cabinet that 500,000 tons of surplus sugar is available with mill owners. The cabinet was told that according to the association, Rs64.19 per kg is the cost of sugar production and it is not financially feasible for the millers to purchase sugar cane at the rate of Rs182 per kg unless they are allowed to export surplus sugar and are given a subsidy on export at Rs20 per kg, as the sugar price in the international market is low.

It may be noted that the cabonet’s Economic Coordination Committee (ECC) has allowed export of 1.5 tons of sugar and a cash freight support of Rs10.7 per kg but even then the millers are reluctant to start the crushing. Therefore, the agriculture department has requested the cabinet to approve the remaining amount of subsidy of Rs9.3 per kg on export of sugar.

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After a thorough discussion on the matter, the cabinet approved the subsidy on the export of sugar. However, the CM said that there must be a condition for the sugar mill owners to clear the liabilities of the growers before they qualify for the subsidy.

The cabinet also discussed fixing the wheat procurement target. The meeting was told that there was a bumper crop of wheat this year and 4.2 tons of wheat production is expected. It was pointed out that 1.7 tons of wheat has already been stored by the government. The cabinet members discussed and decided to fix the procurement target of wheat at 1.4 tons for Rs13 per 40kg.

Food Minister Nisar Khuhro said the provincial government was trying to export 300,000 tons of wheat but the federal government was reluctant to announce the rebate.

Another item on the agenda was the energy department’s proposal for acquisition of additional working interests in the Hub block. The cabinet was told that Sindh Energy Holding Company Limited (SEHCL) was established in pursuance of the Petroleum Policy, 2012 to acquire 2.5% working interest in oil and gas exploration and production blocks partly or wholly located in Sindh.

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The cabinet was informed that SEHCL has initially acquired working interest on a full participation basis with Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company in seven oil and gas exploration and production blocks located in the province.

It was proposed in the meeting that the Sindh government must invest in such projects in the larger interest of the people of the province. The cabinet approved the acquisition of 2.5% working interests in Hub block of PPL.

The cabinet also approved the grant of charter to Government College University, Hyderabad.

Rules for hydrants

Draft rules for water hydrants in Karachi were also approved by the cabinet. Local Government Minister Jam Khan Shoro said there are 200 hydrants in the city and their net profit has never reached Rs15 million but the profit of six hydrants being operated by the water board has reached s80 million. “This is the result of sagacious policy of the water board,” he said.

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Under the approved rules, a committee would be formed for the selection of the location of hydrants and other matters and a proper agreement would be made with the contractor for arranging power at hydrants. The rules also include tankers’ specifications, licence and criteria for drivers and other matters.

Media talk

Briefing the media on the cabinet meeting agenda, Information Minister Nasir Hussain Shah said the provincial government has received Rs60 billion less from the federal transfers. “This attitude causes problems in the financial position of the province,” he said.

Brushing aside the impression that the subsidy on sugar export was announced to accommodate a particular person, Nasir said that the decision was taken to start crushing. Under the new arrangement of giving additional subsidy and fixing sugarcane price, the deadlock between the growers and millers has been brought to an end, he said, adding that neither the cane would dry up and nor the crushing would delay. “This decision has been taken in the interest of the growers and millers,” he said.

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