Data manipulated for sugar export

ECC allows shipment of 500,000 tons based on contradictory summaries

ISLAMABAD:

The government on Friday allowed export of an additional 500,000 metric tons of sugar on the basis of massively manipulated figures of available stocks and consumption patterns – a decision that reflects the dominance of sugar barons.

The decision raises questions on the credibility of the cabinet and its bodies that are making policy choices on the basis of self-contradictory summaries.

While disregarding the official figures of sugar stocks and consumption in the September 20th summary that became the base for export of 100,000 metric tons, the Economic Coordination Committee (ECC) gave the fresh permission on the basis of manipulated figures.

"Due to seasonal effects, the consumption from October to December remains low and as a result the country will have surplus stocks till January next year," said Federal Minister for Industries Rana Tanveer Hussain.

He said that mills would be bound to start crushing by November 21 or else export permission would be cancelled.

"The September 20th decision was based on forecast and the latest decision is based on actual numbers," Industries Secretary Saif Anjum said while defending the decision. He said that the ground consumption figure had changed.

Finance Minister Muhammad Aurangzeb chaired the ECC meeting, which was attended by leading cabinet members. However, the decision was taken on the basis of two self-contradictory summaries, one dated September 18 and the second dated October 10. Both summaries had been signed by Saif Anjum.

"The ECC had a threadbare discussion on the proposal and in light of the recommendation from relevant stakeholders and the ministries, approved the proposal for an additional export of 500,000 metric tons of surplus sugar," the Ministry of Finance announced.

After coming to power, Prime Minister Shehbaz Sharif has allowed export of 790,000 tons of sugar. His family and relatives and other politically influential persons own sugar mills. The finance ministry said that the ECC discussed the summary of the Ministry of Industries, which sought permission for export of 500,000 tons of sugar "in view of availability of surplus stocks".

The ministry claimed that even after catering for exports, the requirement for the remaining two months of the ongoing crushing year would be fully met and also strategic reserves would be maintained.

The finance ministry stated that after taking into account previous exports, the remaining stocks would be 1.014 million tons as on November 30, 2024. After earmarking one-month off-take of 450,000 tons as strategic reserves, a surplus of 564,000 tons would be available.

However, the comparison of the two official summaries showed that the government manipulated the figures. It suggested that the monthly consumption was understated by 114,000 tons, or 20.2%, aimed at showing a surplus of 1.024 million tons.

After excluding the impact of manipulation, the country will be left with only 336,000 tons of stocks after exports that are hardly sufficient for three weeks of consumption. This may create shortage in the market and could lead to price spike.

On September 20, the ECC allowed export of 100,000 metric tons of sugar in line with a summary of the Ministry of Industries.

According to the ECC's September 18 summary, total consumption during the first eight and a half months of current crushing year 2023-24 was 4.797 million tons. This translates into monthly consumption of 564,353 tons.

The Federal Board of Revenue (FBR), Pakistan Sugar Mills Association (PSMA) and provincial cane commissioners "confirmed that in the next three and a half months (till the commencement of next crushing season), expected domestic consumption would follow the same pattern as in previous eight and a half months and would stand around 1.974 million tons".

All the three main stakeholders had three weeks ago certified about 564,000 tons of monthly consumption from August 16 till November 30.

Surprisingly, Industries Secretary Saif Anjum signed another summary on October 10, which the ECC approved on Friday having numbers contradicting the old summary figures.

The ECC was told on Friday that there was an agreement among the provincial cane commissioners, FBR and PSMA that total consumption during the last 10 months (till the end of September) was 5.456 million tons, or 545,060 tons per month.

In a clear sign of manipulation, the ECC was told that the next two months consumption would be only 900,000 tons at the rate of 450,000 tons per month.

The committee was informed that compared to previous trends, the off-take in September was only 450,000 tons, which showed suppression of sales by 114,000 tons, or 20.2%. The ECC accepted the new figure while ignoring past consumption trends.

If September's verified figures are taken, Pakistan will be left with only 336,000 tons of sugar after fresh exports, which will create shortage for about one and a half months.

The ECC also discussed and approved a summary submitted by the Ministry of Energy seeking compensation for the deceased Chinese employees of Port Qasim Electric Power Company.

Two Chinese nationals had been killed in a suicide attack on October 6 and one got injured. The ECC approved $516,000 in compensation for the family of each deceased Chinese national.