Keeping it sweet
Pakistan’s antitrust regulator has proposed a set of measures to overhaul the sugar industry
Pakistan’s antitrust regulator has proposed a set of measures to overhaul the sugar industry — the country’s second largest agro-based industry producing as it does refined sugar and brown sugar from sugarcane — and make it more effective. Considering the sugar industry’s performance of the last two years when the cultivation of sugarcane was incentivised and sparked a glut in supply, it is only fair to try and improve cane quality, enhance and diversify production processes, and focus on export competitiveness.
The Competition Commission of Pakistan’s (CCP) recommendations — based on a Jan 25th meeting with key stakeholders such as growers, millers, retailers, distributors, consumers as well as the federal and provincial governments — were drawn up in the wake of a sugarcane procurement crisis in the country. The antitrust body wants the federal authorities to end the price floor or the sugarcane support price and instead allow the market to set the price based on supply and demand. However, such a move would have to be based on independent and reliable data and take into account divergent conditions and factors prevalent in different areas. It may also want to consider any support price of other crops.
Some more short-term and long-term proposals need to be formulated on an emergency basis in a bid to tackle the problems faced by the sugar industry. It is also clear that sugar mills and producers should be allowed to export surplus sugar without overly disturbing the domestic price of the commodity. This may enable sugar mills to settle once and for all the outstanding dues of farmers and make adequate preparations for the next crushing season. The anti-trust regulator believes the government ought to play its due role as underwriter and ensure timely payments to the farmers. The government should also help bring down the cost of producing sugarcane by promoting proper research and development.
Published in The Express Tribune, May 9th, 2018.
The Competition Commission of Pakistan’s (CCP) recommendations — based on a Jan 25th meeting with key stakeholders such as growers, millers, retailers, distributors, consumers as well as the federal and provincial governments — were drawn up in the wake of a sugarcane procurement crisis in the country. The antitrust body wants the federal authorities to end the price floor or the sugarcane support price and instead allow the market to set the price based on supply and demand. However, such a move would have to be based on independent and reliable data and take into account divergent conditions and factors prevalent in different areas. It may also want to consider any support price of other crops.
Some more short-term and long-term proposals need to be formulated on an emergency basis in a bid to tackle the problems faced by the sugar industry. It is also clear that sugar mills and producers should be allowed to export surplus sugar without overly disturbing the domestic price of the commodity. This may enable sugar mills to settle once and for all the outstanding dues of farmers and make adequate preparations for the next crushing season. The anti-trust regulator believes the government ought to play its due role as underwriter and ensure timely payments to the farmers. The government should also help bring down the cost of producing sugarcane by promoting proper research and development.
Published in The Express Tribune, May 9th, 2018.