Islamabad:
Prime Minister Shehbaz Sharif has constituted a committee, led by the VicePrimer Minister Ishaq Dar, to negotiate with sugar factories a price reduction after its previous decision to allow the export of the merchandise led to an increase of 2,200% in its export and a 19% increase in prices this year.
The price per kilogram of sugar has shot an average of RS172 from last Friday: RS27 per kg higher than the same week of the last year, according to the Pakistan Statistics Office (PBS). The increase of RS1 per kg eliminates RS2.8 billion from consumer pocket, according to the work of the Ministry of Food Security.
The Prime Minister’s office has notified a 10 members committee with the mandate to reduce sugar prices by committing to the Association of Sugars Mills of Pakistan (PSMA), the association that works only for the protection of the interests of the mills.
The Pakistan Competition Commission (CCP) has investigated the PSMA in the past for its role in price manipulation. The prime minister also has the portfolio of the Minister of Industries and the Mills Sugar are now directly under his domain.
The new committee will be chaired by DAR, in charge of giving its report within three days. The committee held its first meeting on Monday, according to officials. At the meeting, the Government told Millers of Sugar that the average price of sugar production was RS153 per kg, therefore, the industry should reduce prices.
The industry, however, sought time to consult all those interested before committing a new price, officials said.
The prime minister established the committee led by giving after the average sugar prices increased after sugar prices increased by RS10 within a week and RS27 compared to last year, according to the National Data Collection Agency. He also reported that the maximum national price shot at RS180 per kg in Karachi and Islamabad.
The prices were also RS27 per kg higher than the maximum threshold of RS145, which the Government had determined when giving permission to export 600,000 metric tons of sugar.
An official of the Ministry of Food told Express PAkGazette on Monday that the increase of RS1 per kg gave an additional benefit of RS2.8 billion to the mills. According to this count, Millers obtained RS26 billion additional benefits in the last week and RS76 billion since the beginning of the crushing season.
A key reason behind the increase in sugar prices was the decision of Prime Minister Shehbaz Sharif to allow sugar export. The PBS launched on Monday the export data, which revealed that the country exported 757,779 metric tons from July to February of this fiscal year.
Compared to the last year, when only 33,101 metric tons had been exported, there was an increase of 2,190% in export in this fiscal year, showed the data. In terms of value, exporters earned $ 407 million during the July-February period, which was also $ 386 million or 1,831% higher than the previous fiscal year, according to PBS data.
According to the notification of the Prime Minister’s office, the Committee will be involved with the PSMA to negotiate a reduction in the former sugar mill price, with the aim of stabilizing market prices, particularly in response to the strong increase observed during Ramazan.
The Committee included the Minister of Food Security, Rana Tanveer Hussain, the Minister of Law, Azam Nazeer Tarar, advisor to Prime Minister Dr. Tauqir Shah, special assistant of the Prime Minister Tariq Bajwa and four representatives of the PSMA. The Secretary of Industries provided the support of the Secretariat.
The Government has not officially included special prime minister assistant to Industrias Haroon Akhtar Khan in the Committee. Shehbaz instructed the committee to conclude their deliberations and present a compliance report within three days, confirming that the problem of increasing sugar prices had effectively resolved.
Iskandar Khan, president of the Khyber-Pakhtunkhwa chapter (KP) of the PSMA, said prices shot due to the increase in sugarcane prices during the crushing season. He added that the average price of sugarcane remained RS455 for 40 kg, which brought the cost of production to RS174 per kg. Khan said that raw sugar would also cost RS190 per kg after refining it.
On September 20, the ECC allowed the export of 100,000 metric tons of sugar, which increased to 600,000 in October last year. The Express PAkGazette had reported in October that the Government allowed the export of 500,000 metric tons of additional sugar on the basis of massive manipulated figures and consumption patterns available.
However, the PSMA denies that prices fired due to exports. His spokesman in the Punjab area declared that the industry agreed that the prices of former mill would remain limited to RS140 per kg during the export period, which was below its production cost.
However, due to the huge surplus actions, ex -mill prices remained between RS120 and RS.125 per kg, well below this reference point, continuously for many months, he added. Almost 50% of the total available sugar was sold a lot below its production cost, which caused mass losses for the industry, he added.
PSMA spokesman said the price mechanism depended on market forces. He blamed the increase in prices for hoarders and deposits that disseminated rumors to influence market forces to obtain undue gains available with them.
The PSMA spokesman declared that white sugar imports were needed, since national stocks were sufficient to meet the domestic requirement until the beginning of the next season of crushing. But he added that the PSMA supported the import of raw sugar through a policy mechanism and had presented its proposals to a ministerial committee constituted by the government.
