ISLAMABAD: Ministry of Industries and Production has written letters to Chief Secretaries of Punjab, Sindh and Khyber Pakhtunkhwa (KPK) terming the hoarding of sugar an offence. It directed that strict remedial measures be taken with immediate effect to ensure availability of commodity in the market, well-informed sources told Business Recorder. Sugar prices in retail have touched Rs 70 per kg from Rs 60 per kg within days after Pakistan Sugar Mills Association (PSMA) Sindh refused to supply sugar in the market on the plea that since the government has not extended subsidy on sugar export they will not bring sugar to the market.

Sugar industry claims it has produced a record 6.986 million tons of sugar which is far in excess of domestic requirement of about 5.1 million tons. PSMA on June 7, 2017 had assured the Ministry of Industries and Production that instructions regarding price stability of sugar will be adhered to in letter and spirit.

According to the Finance Minister, Senator Ishaq Dar, there are standing instructions from Economic Coordination Committee (ECC) of the Cabinet that stability in price of sugar in domestic market is to be ensured for benefit of the general consumers.

“Non-release of stock has led to increase in prices artificially and this act amounts to profiteering and hoarding which is an offence,” the sources quoted MoIP as saying in the letter.

On July 18, 2017, Finance Minister who is also Chairman ECC observed during the ECC meeting that out of total quantity of 0.425 million tons (already allowed by the ECC for exports of sugar), 0.348 million tons was exported till May 31, 2017. At this juncture, when a considerable quantity of sugar (out of allowed quantity) was still surplus, allowing additional quantity of 0.6 million tons for export in one go would not be a prudent decision, as it might affect domestic price of the commodity.

He asserted that domestic sugar price stability and maintenance of strategic reserves of sugar in the country were two important considerations which should be taken into account by the Ministry of Commerce, before moving a proposal to allow export of sugar.

On July 18, 2017, the ECC approved export of 0.3 million tons of sugar, in addition to the quantities already allowed for export by the ECC, subject to the following conditions: (i) the committee constituted by the Prime Minister will meet during first week of every month to review stock/export and price situation; (ii) in case of any abnormality in the domestic price of sugar, the committee would recommend stopping further exports to the ECC; (iii) the export quota will be approved and monitored by the State Bank of Pakistan (SBP) on first come first serve basis; and (iv) once 0.2 million tons out of allowed quantity of 0.3 million tons is exported, the inter-ministerial committee will meet again to review the stock/export and price situation and consequently would recommend further export quantities, if deemed appropriate.

Commerce Ministry was supposed to convene an inter-ministerial committee meeting headed by the Commerce Minister during the first week of the current month but it could not do so due to dissolution of federal cabinet after he Supreme Court disqualified Prime Minister Nawaz Sharif in the Panama papers case.

The new Commerce Minister Pervaiz Malik took charge of the ministry on August 8, 2017 and held a detailed meeting with the officials of Commerce Ministry, wherein he also sought briefing on sugar issue.

The sources said, Commerce Ministry is expected to convene a meeting of the inter-ministerial committee as the Commerce Minister has assured his availability after the disqualified former Prime Minister reaches Lahore.—MUSHTAQ GHUMMAN