Averting sugar crisis : SAB defers export of sugar by 45 days
September 06, 2013
By Razi Syed
KARACHI: In order to avert sugar crisis in the country the Sugar Advisory Board’s (SAB) has deferred the export of sweetener by at least 45 days.
Hailing the decision the members of Sindh Agriculture Forum (SAF) said recent monsoon rains flashed out around 30 percent of the standing sugarcane crop in Sindh and Punjab growing belts.
In this perspective the decision of SAB was appropriate and could save the consumers from shortage of commodity besides possible price hike, they added.
The government was intending to allow around 500,000 tonnes of sugar in view of better stocks but after the damage to sugarcane crop it was not feasible to allow export, exporters opined.
Now the SAB would seek complete information from the provincial governments and real stakeholders besides growers to ascertain the actual damage to sugarcane crop besides stocks position in the government warehouses.
According to sugarmills representatives, the mills in the country have around 2.1 million tonnes of sugar while according to Trading Corporation of Pakistan the national entity has around 106,000 tonnes stocks.
Under the recent Sugar Policy 2013, Pakistan is likely to face sugar shortage, which will also increase its price on back of impractical export policy of the sweetener.
De to the provision by the government providing conditional relief to the sugarmills by reducing the Federal Excise Duty (FED) by 7.5 percent to 0.5 percent from 8.0 percent, the country’s stockpile could come down to around 400,000 tonnes, sources in the Federal Board of Revenue (FBR) said.
This relief has been provided to the sugarmills for supplying the commodity to the domestic market.
However, a condition had been applied to avail the benefit of 0.5 percent FED – the quantity on which the facility was being provided should be equal to the quantity exported otherwise the rate of FED would remain the same at 8.0 percent.
A spokesman of SAF said the export of more than 1.0 million tonne would create shortage besides increase the domestic prices.
According to United States Department of Agriculture’s (USDA) foreign agriculture department, such an act would be against the World Trade Organisation’s agriculture rules and regulations.
This will somehow discourage the sugarmill owners by and large who were dear and near to the ruling and leading political parties of the country, and 90 percent of the overall sugar magnets in the country.
However, some of the Economic Coordination Committee (ECC) members voiced their concern against allowing quota-free export and were of the view that this might lead to shortage in the country.
The ECC had allowed Rs 1.75 per kilogramme with $18 per metric tonne in land freight subsidy to exporters.
The consumers could have faced price increase and shortage of sugar if the government had not provided sugar mills Rs 2.1 billion subsidy on transportation.
India is likely to import sugar from Pakistan as it imported about 500,000 tonnes of sugar from Pakistan in 2012.
India, the world’s second biggest sugar producer after Brazil would face shortage of around 1.0 million tonne sugar as it is likely to produce about 25 million tonnes sugar by end of September 30, 2013, according to estimates from the National Federation of Cooperative Sugar Factories. Courtesy Daily Times
Sugar Crisis in Pakistan,
Published in ZaraiMedia.com