After wheat, PTI govt eyes importing sugar

The PTI govt had given permission to export 1.1 million tons of sugar

ISLAMABAD: The federal government has decided to import sugar to break the monopoly of barons who have earned billions of additional rupees by increasing the prices almost 30% in past one year.

The prices of sugar went up after the Pakistan Sugar Mills Association managed to secure the government’s permission to export 1.1 million tons of sugar. It has now been decided to waive import duties of 40% that had been slapped to discourage import of cheaper sugar.

“The government has decided to import sugar and also discontinued its exports,” said Dr Firdous Ashiq Awan, the special assistant to prime minister on information, on Saturday.

Sugar is the second commodity that the Pakistan Tehreek-e-Insaf government will import after first allowing its export. Earlier, the government decided to import 300,000 metric tons of wheat after first allowing its export.



The decision to import sugar is tantamount to an admission that the government cannot break the sugar cartel in the country that has increased per kilo prices by Rs17.4 or 29% since January 2019.

In January last year, the average price of one-kilo sugar was Rs58.41 that went up to Rs75.77 as of January this year, according to the Pakistan Bureau of Statistics. Since July last year, the sugar exports stood at 181,477 metric tons, according to the PBS data.

Federal Minister for National Food Security Makhdoom Khusro Bakhtiar and former PTI Secretary General Jahangir Tareen are major stakeholders in sugar business in Pakistan.

Despite repeated attempts, Bakhtiar was not available for comments.

The prices of sugar went up due to an increase in General Sales Tax rate from 8% to 17%, high financing cost that surged from 8% to 16% and increase in sugarcane price, said Iskandar Khan, President of PSMA, Khyber-Pakhtunkhwa chapter.

Iskandar said that there was no shortage of the commodity in Pakistan and prices went up because of other factors.



The PTI government had given permission to export 1.1 million tons of sugar. He said that over 600,000 metric tons of sugar has already been exported.

The decision to allow export of sugar often results in an increase in the price of the commodity in the local market.

The Sugar Advisory Board met this week and recommended that the government import 300,000 tons of refined sugar in an attempt to control surging prices of the commodity. On Friday, the Ministry of Industries and Production sent a summary to the Ministry of Commerce, recommending it to allow import of 300,000 metric tons of sugar.

Razad Dawood, heads both the Ministry of Commerce and Ministry of Industries.

The import is proposed through the Trading Corporation of Pakistan (TCP) for using it as strategic reserves to control prices. The last PML-N government had shelved the strategy of maintaining the strategic reserves, which gave a free hand to sugar barons.



In its summary, the Ministry of Industries wrote that presently the average retail price of sugar as of January 30, 2020 was Rs79.06 per kilo.

During the Sugar Advisory Board meeting, representatives of Punjab and K-P governments said that due to overall decline in sugarcane production this year, production of sugar is expected to decrease in the current crushing session.

Still, the industry expects to produce 5.7 million metric tons of sugar, which is sufficient enough to meet the needs.

The industries and production secretary had also discussed rising prices of sugar in a meeting held in October last year. The secretary then wrote a letter to the provincial chief secretaries, asking them to control hoarding and profiteering in the respective provinces.

The Punjab government has fixed the retail price of sugar at Rs70 per kilo, utilising powers under the Price Control and Prevention of Profiteering and Hoarding Act, 1977 in all its districts. But it could not ensure implementation of the decision.

According to the International Sugar Organization, the international white sugar price should be Rs62.60 per kilo. At federal level, TCP, Commerce Division can import sugar for domestic use with no tax and duties that would make imported sugar cheaper than domestically produced sugar and ease the situation, according to the Ministry of Industries’ recommendation.