Jaggery exporters seek ban lifting

Govt delays decision for two weeks to assess impact on sugar prices

Zafar Bhutta May 15, 2020
Gurr or jaggery

ISLAMABAD: After sugar exporters, jaggery (Gur) and organic brown sugar exporters have sought the lifting of ban on exports, which has been imposed in the wake of investigation into a sugar scam by an inquiry commission.

The government has delayed decision on withdrawing the ban on Gur and organic brown sugar exports.

Sources told The Express Tribune that Prime Minister Imran Khan asked about the ban on export of Gur and organic brown sugar in a meeting on April 28. The minister for industries and production told the premier that the decision on lifting the ban had been delayed for two weeks in order to assess the possible impact on sugar prices if the export of Gur and organic brown sugar was allowed.

“No decision has been taken yet and export of Gur as well as organic brown sugar is still banned. The Ministry of Industries took up the issue with the Economic Coordination Committee (ECC) but it was decided to keep the restriction in place till the end of Ramazan,” an official revealed.

Afghanistan is a big market for Gur export. Sugar millers have a monopoly in the market. Farmers of Khyber-Pakhtunkhwa have sought permission for Gur export. In the past, the commodity was exported to Afghanistan as well as Gulf countries.

The inquiry commission is currently investigating the export of sugar that caused price hike in the domestic market and gave a windfall of billions of rupees to the millers. The millers also gained from subsidy on sugar export.

The government gave three more weeks to May 16 to the inquiry commission for completing its probe. Earlier, the commission sought more time as the director general of the Federal Investigation Agency (FIA) was of the view that the scope of the investigation was very vast and a lot of information processed and analysed needed further collaboration and follow-up.

“The whole process is time-consuming and despite the best of efforts cannot be completed in the stipulated time,” he said.

Federal Minister for Planning and ex-finance minister Asad Umar appeared before the inquiry commission this week as he chaired the ECC meeting that allowed the export of sugar. The ECC allowed export of one million tons of sugar in October 2018 with the condition that no subsidy would be given to the millers on shipments. However, the ECC, in its meeting in December 2018, took some major decisions.

It told provinces to give subsidy to the millers on sugar export. It also decided to release Rs2 billion worth of subsidy pending since the tenure of previous Pakistan Muslim League-Nawaz (PML-N) government. It increased sugar export quota from 1 million to 1.1 million tons.

Punjab gave Rs3 billion in subsidy following the decision whereas Sindh did not release any subsidy.

Umar told the inquiry commission that despite sugar export, there was no major increase in prices in the domestic market till April 2019.

He was of the view that sugar prices went up after he was removed from the finance ministry, adding that it was also decided that an inter-ministerial committee would outline of trend of sugar prices and export.

However, he said, no report was given till April 2019. The sugar mafia formed a cartel, which managed to pocket a profit of Rs100 billion, Umar said. China committed to import sugar from Pakistan, which would have built foreign currency reserves, but 70% of the commodity went to Afghanistan.

He told the commission that all technical decisions were made by the Sugar Advisory Board, which reviewed the stock situation and recommended export of the sweetener.

Published in The Express Tribune, May 15th, 2020.

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