Cabinet panel reverses raw sugar import plan

The decision was taken by a six-member ministerial committee set up by the Economic Coordination Committee.


Shahbaz Rana August 17, 2010

ISLAMABAD: A cabinet panel on Monday reversed a plan to import 500,000 metric tons of raw sugar amid depleting stocks and escalating prices of the commodity.

The decision was taken by none other than a six-member ministerial committee set up by the Economic Coordination Committee to ensure smooth supply of sugar in the market. Last month, the same ministerial committee recommended importing 500,000 metric tons of raw sugar before the start of the crushing season. The committee is headed by Industries and Production Minister Mir Hazar Khan Bijarani.

Though within a month of taking the decision to import raw sugar before November,  the ministerial committee  found out on Monday that it “was too late to source raw sugar at the beginning of the crushing season since it would take 80 days to import it from Brazil”.

The panel observed that raw sugar could either be imported at the beginning or at the end of the crushing season. “The best option would be to make a decision in the month of December about the quantum of raw sugar import at the end of the crushing season,” it added.

The best decision, it argued, can only be taken when the effect of floods on the sugarcane crop is clearer. Flash floods have damaged sugarcane crops in some places while other areas are likely to have greater sucrose recovery so the final sugar yield may stay unaffected.

This is the second such u-turn by the ministerial committee, and will probably have a direct bearing on consumers. Earlier, it had found that the Trading Corporation of Pakistan was responsible for the delay in the import of 1.2 million metric tons of sugar till June. Yet within a fortnight it suggested relying on the same TCP for the import of the commodity.

The committee will present its report to the ECC for the final decisions related to raw sugar import.

Sugar prices in the open market have jumped to over Rs73 per kilogram and the government has announced that the commodity would be sold at the utility stores for Rs55 per kg during Ramazan. After Ramazan, however, its price would fall by Rs10 at government-owned stores as opposed to the open market. So far, it has not been able to arrest the rising trend.

A sugar dealer has predicted that the commodity rates would touch Rs90 per kg very soon, as its stock was depleting. The country has slightly over two months stock and there are apprehensions that the crushing season may not start this year in November due to the devastating floods.

“The government job is good governance not to import sugar,” said Pakistan Sugar Mills Association president Iskandar Khan. The business of importing sugar should be left to the private sector so that there is no hoarding or cartelisation, according to Iskandar Khan.

The ministerial committee also decided that that from the next season, the TCP will not be used to import sugar. It decided to leave the job to the private sector. The meeting agreed to continue with the import of the planned 1.2 million metric tons refined sugar.

Published in The Express Tribune, August 17th, 2010.

COMMENTS (1)

Ghazi | 13 years ago | Reply Both ECC committee on Sugar and TCP are to be held responsible for this sitiuation. Last month ECC committe on sugar had called a suppliers meeting and it recived offers from international firms in the range of 515 to 555 USD per MT and some offered delivery in one to weeks but the committee displayed thier non serious attitude and the international suppliers left the meeting as the attitude and the conduct of the meeting was very unprofessional. Mr. Bajrani refused to answer questions related to the supply of sugar in the meeting and started discussin about the impport of sugar by private companies. All the suppliers reminded the ministers in the meeting that this is not a importers meeting but is a suppliers meeting and the agenda of the meeting is that ECC will decide a supplier on the basis of prices. ECC reffered the case to TCP and TCP then had created some unreasonable conditions to participate in the tender like they wanted a 5 % bid bond and a 10 % performance bond, without even considering international banking laws. The tender was awarded at above 700 USD and 674 USD MT. Now the same committe is beating about the bush as they can make 50-100 USD in commission on each MT thru their preffered suppliers and the burden is passed on the public.
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