ISLAMABAD: The federal government is likely to impose a ban on export of Gur as sugar is being smuggled under the garb of Gur exports, well-informed sources in Commerce Ministry told Business Recorder.

The issue of sugar being smuggled to Afghanistan under the garb of Gur has been discussed at different levels as the price of sugar in Afghanistan is Rs 160 per kg, the sources added.

Most of the sugarcane harvested in Peshawar valley is diverted for commercial Gur production and no sugarcane is available for crushing. The sources said, Premier Sugar Mills & Distillery Co Limited and Khazana Sugar Mills Ltd, with total production capacity of 150,000 MT have not been able to even achieve their 10 percent capacity and could only produce 2,000 Mt sugar so far.

Peshawar Valley, consisting of Peshawar-Mardan-Charsadda, is known for its fertile land, best suited for cultivation of sugarcane supplying to its decades old sugar industry, which played a vital role for uplift of local economy. However, the present condition of sugar sector indicates that due to discriminatory tax policy of the past few years, the commercial Gur producers consume over 95 percent sugarcane output. As a result the sugar industry of this region has been facing severe shortage of sugarcane and the situation has forced the millers to close two sugar mills out of four with the existing sugar mills with capacity to produce 150,000 MT of sugar have been able to produce 5000 Mt only in current season, which is not even 5 percent of their capacity.

These conditions are leading to a complete closure of sugar industry in this valley which will further increase unemployment and adversely affect supply and price of sugar in the Province. The core reason of this huge diversion of 95% sugarcane supply, approx. 300,000 MT, is illegal smuggling and unchecked export of Gur to Afghanistan.

The sources said, the issue of export/smuggling of Gur to Afghanistan is a key problem for the government and weak actions have not been able to curb smuggling. The export of Gur is now incentivised with higher prices of sugar in Afghanistan.

"The government is now contemplating imposing a ban on export of Gur to Afghanistan so that sugarcane is made available to sugar mills," the sources added.

Commerce Ministry is responsible for moving any summary for export, import or ban on export or import of any product, after obtaining approval from the Economic Coordination Committee (ECC) and the federal cabinet.—MUSHTAQ GHUMMAN