Imported sugar costs Rs13b more

Increase in import price adds to burden of Rs28 per kg subsidy

LAHORE:

The government is facing additional expenses of more than Rs13 billion for providing 200,000 tonnes of expensive imported sugar to consumers at subsidised rates.

Official estimates show that about Rs7.6 billion has to be paid due to increase in the sugar import price, while Rs28 subsidy per kg for the consumers will cost Rs5.6 billion.

According to the Cane Commissioner's Office, the government is importing sugar at Karachi port at Rs114 per kilogramme, while it will be sold at Rs90 per kg in the shops, including sahulat bazaars and Sunday markets, under the supervision of the deputy commissioners of all districts. The dealers will be provided the commodity for Rs86 per kg.

Last year, the price of imported sugar was Rs76 per kg and Punjab had been informed by the federation that it would be supplied sugar at the port for Rs109 per kg. However, the Trading Corporation of Pakistan (TCP) has unexpectedly sent an invoice to the provincial food department at the rate of Rs114 per kg. According to The government has to pay billions of rupees more due to the delay in the decision of import of sugar.

Of the 200,000 tonnes of sugar imported through the TCP, of which 150,000 tonnes has been allocated to Punjab and 50,000 tonnes to the Khyber-Pakhtunkhwa government.

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However, the quality of imported sugar is also being questioned and dealers are looking to pick up locally produced sweetener. About 250,000 tonnes of sugar is reportedly available in the stock of sugar mills in Punjab but the district administrations have stopped taking procuring sugar from them. The government also appears to be facing difficulties in selling imported sugar because consumers prefer the local product.

In addition to the stock available in the mills for the ongoing month, sugarcane crushing is likely to begin next month in South Punjab and later this month in Sindh. Three ships carrying 30,000 tonnes each of imported sugar have reached the port, while the fourth will arrive on October 12. Ships carrying 25,000 tonnes of sugar each will reach Karachi on October 19, on October 26 and November 2. The current price of sugar in the market is up to Rs110 per kg.

Punjab Cane Commissioner Muhammad Zaman Wattoo said the federal and provincial governments would equally share the cost of the subsidy. He said the mills were being consulted about the crushing schedule and a meeting of Punjab Sugarcane Board would be held in this regard on October 14.

In addition to issuing directions to the deputy commissioners to make available the imported sugar at retail shops at Rs90 per kg through dealers in all districts, Punjab government, in a meeting chaired by Industries Minister Mian Aslam Iqbal and Chief Secretary Kamran Ali Afzal on Saturday, decided to increase the number of price control magistrates in the province.

Published in The Express Tribune, October 10^th, 2021.