Government urged to buy sugar
Lahore: The sugar industry wants the government to ease restrictions on the sweetener’s export and order the Trading Corporation of Pakistan (TCP) to buy additional 500,000 tonnes sugar from the mills over the next five months to stabilise its domestic prices to help them ward off the losses and bank defaults and ensure early payment to cane growers.
The mills are estimated to produce 6 million tonnes sugar this year against domestic demand of 4.5m tonnes that has brought considerable pressure on its prices.
This is the third consecutive year of surplus production. The government has already asked the TCP to procure the sweetener for supplying to the utility stores and allowed export of half a million tonnes sugar to help the millers clear their stocks from the last harvest.
The market could be stabilised through purchase of 100,000 tonnes sugar every month by the TCP for creation of a buffer stock to be offloaded in the market only when and if the retail prices shot up. This purchase should be in addition to the one being made for utility stores, it says.
The sugar industry is one of the most regulated sectors because the government fixes cane support price which constitutes 80pc of the total production cost as well as keeps checks on its consumer prices.
The millers also want the government to release the last year’s export subsidy of Rs1.7 billion to ease liquidity crunch facing them.
During the last crushing season 2012-13, the industry exported about 1.2m tonnes of sugar and earned precious foreign exchange of $600m for the country,” the letter says. It demands the continuation of the same export policy and incentives for the current season and removal of all conditions.