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Pak sugar mills seek export permission
Publication Date : 07-09-2012
The sugar industry of Pakistan yesterday urged the government to allow export of 500,000 tonnes of sugar before the commencement of crushing in view of the expected record five million tonnes production of the commodity in the next harvest.
The demand was made by Pakistan Sugar Mills Association (PSMA) Chairman Javed Kayani in a letter addressed to the prime minister. In addition, the industry also wants the government to permit it to provide 100,000 tonnes raw sugar to Iran.
“The provincial governments are in the process of announcing sugarcane support price for the next crushing season. The increase (in support price) will further impact the cost of sugar production in a surplus year as we anticipate output to be about five million tonnes, which will surpass all previous production figures.
After meeting domestic demand of 4.2m tonnes and a carryover unsold stock of 400,000 tonnes, the mills will still have surplus stocks in excess of 1.2m tonnes, the disposal of which is mandatory.
“We, therefore, suggest that the government allows us to export 500,000 tonnes of sugar and provide 100,000 tonnes to Iran (in raw form). Besides, the industry would want the Trading Corporation of Pakistan to maintain 500,000 to 600,000 tonnes of sugar as strategic reserves to meet the requirements of the Utility Stores Corporation meant to help the poor,” Kayani said in the letter.
The industry wants the government to take a decision on its suggestions before the start of the next harvest in order to keep the domestic market and prices from coming under pressure due to surplus production.
It says the implementation of its proposals will help the industry to make timely payments to growers during the next crop cycle starting in November.
The PSMA has also urged the prime minister to cancel the last year’s export contracts against which no “physical export” could be made. The government had permitted the industry to export 300,000 tonnes sugar last year with the condition of export quota of 5,000 tonnes per mill.
“We understand that there has been a less physical export as against contracts registered with the State Bank of Pakistan due to decline in export price and severe competition from India and Thailand.”
“We request you to direct the SBP to cancel all those contracts registered with it against which no physical export has taken place so far and allow the remaining quantity to be exported before the start of next crushing season,” the PSMA letter called upon the prime minister.
Kayani has assured the government that the implementation of its proposals will have no (negative) effect on the domestic market. Instead the industry will be able to earn foreign exchange for the country.