Govt postpones sugar export decision

Seeks to prevent a repeat of last year's price spike

ISLAMABAD:

The federal government has deferred a proposal to immediately allow sugar exports, deciding instead to review the issue closer to the next crushing season to minimise the risk of domestic shortages and a spike in retail prices.

The decision was taken by a subcommittee headed by Deputy Prime Minister Ishaq Dar, which concluded that any decision on exporting surplus sugar should be made nearer the commencement of the next crushing season.

According to the officials, the move will ensure adequate domestic supplies and avoid a repeat of last year's sharp increase in sugar prices following export approvals.

According to sources, the government is expected to reconsider allowing exports of surplus sugar as the next crushing season approaches. The decision to defer approval was taken to prevent shortages in the local market and curb any potential increase in prices.

Sugar millers have claimed that the country currently has a surplus of 1.3 million metric tonnes of sugar and estimate that exports could generate around $500 million in foreign exchange earnings.

Sources said the government also wanted to avoid a situation in which it would have to import sugar later to replenish domestic stocks.

According to officials, if exports are not permitted, sugar mills may find it difficult to offer farmers competitive prices during the next crushing season.

Last year, after the government allowed sugar exports, retail sugar prices in the domestic market climbed to more than Rs180 per kilogram, prompting concerns over the impact of exports on local consumers.