Millers ask govt to remove conditions for sugar export

Call for ending role of state in setting sugarcane price, deciding exports

ISLAMABAD: Sugar millers are putting pressure on the government to allow defaulter mills the export of the sweetener.

The government had imposed some conditions on sugar mills while allowing the export of sugar, which included that the defaulter mills would not be allowed to export the sweetener. Now, the mills want the government to waive these conditions.

The Pakistan Sugar Mills Association (PSMA) demanded on Tuesday that the government give subsidy on sugar export, adjust sales tax and determine sugarcane price judiciously.

They also demanded that the price of sugarcane and export of sugar should be deregulated to end the role of federal and provincial governments.

Speaking at a press conference, PSMA Chairman Aslam Faruque complained that the ex-mill sugar price was Rs47 per kg while the tax was being charged at the presumed price of Rs60 per kg. Besides, the mismatch between sugarcane and sugar prices was making it unfeasible to start the mills, he added.

Faruque said provincial governments had fixed the sugarcane price at Rs180 per 40kg whereas taxes were high and the sugar price was at a lower level. “How can we start sugarcane crushing? How can we bear the loss of Rs15 per kg on sugar sale at a time when the government also owes Rs16 billion to the mills,” he asked.

“We have no issue with the growers, we have cleared 99% of their outstanding bills,” he claimed, adding, “we want the growers to get more than the current price of sugarcane, but the government should also give us a good rate while keeping in mind the growth and viability of the sugar industry.”

“Give us a good price of sugar [locally] or give us subsidy to clear the surplus through exports,” the chairman demanded.

He pointed out that 80% was the cost of sugarcane, 10% comprised taxes while the remaining 10% was for the sugar mills, adding that the government owed Rs16 billion on account of subsidy and called for clearing the dues.



“We request the government to have a sugar export policy, so we could export the product when it is in surplus. We would make the mills responsible so that if there are shortages, they will fill the gap.”

The price of sugar must be increased to Rs65 per kg to make the business viable, he said.

At present, according to the chairman, both the growers and millers are facing the adverse impact of wrong policies of the government. The federal government has to take a decision on it. The government is charging sales tax on a price of Rs60 per kg from the mills whereas the ex-factory price was Rs47 per kg.



PSMA member Waheed Chaudhry said whenever the industry asked for exports, the commerce ministry countered that the country would face shortage and prices would shoot up, but in reality it was not the case.

“Unfortunately, every time we are given the permission for exports, when the crushing season starts and prices in the international market are always low.” Chaudhry warned that if flawed policies of the government remained in place, then in 2020, Pakistan would be importing sugar.

Published in The Express Tribune, November 28^th, 2018.

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