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Export of 0.1 million tons of sugar allowed

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Economic Updates - Pak Major Financial News

With some members expressing concern, the Economic Co-ordination Committee (ECC) of the Cabinet on Tuesday allowed export of 0.1 million tons of sugar.

Sources quoted Secretary Commerce as saying that export-based surplus sugar should be carefully monitored, whereas one member of the ECC was against allowing export of sugar till the start of crushing season.

Another ECC member said the country would have a surplus sugarcane production but may not have as much as being projected by the industry, and not allow export at this stage.

The export of sugar, an official said, would provide financial benefit to the middleman and sugar mills, not growers, because mills are purchasing sugarcane at a lower price and would export sugar at a higher price.The Ministry of Industries had opposed in the last ECC meeting the demand of sugar mills to allow export on the ground that lean production in 2013 may compel the country to import expensive sugar.

The Ministry's proposal to the government in the last ECC meeting was of further purchasing 0.622 million tons sugar from the domestic market to maintain the strategic stocks.Sources aid that decision to export sugar was taken without much discussion and deliberation by the ECC meeting presided over by Finance Minister Dr Abdul Hafeez Shaikh on the recommendation of the subcommittee headed by Shahabuddin, Minister for Textiles, proposing export of 0.2 million tons sugar.A committee headed by Shahabuddin was constituted at last ECC meeting to examine the issue of export of sugar holistically and submit recommendations.

The ECC was informed that left-over stocks from 2010 to 2011 were 0.9 million tons, and the current crop is expected to yield production of around 4.5 million tons to 5.0 million tons.

Taking annual consumption of 4.2 million tons, expected surplus would be around 1.5 million tons.According to a statement, the export of sugar, it may be added here, is banned since 2009.

The Minister while allowing the export of sugar asked the concerned ministries to ensure that no single party should get benefit and modalities for the export to be finalised in co-ordination with the State Bank of Pakistan (SBP).On a request of the Pakistan Cotton Ginners Association to the Prime Minister that the government should buy one million bales of cotton lint at Rs.6500/bale, the ECC was informed that only a small stock of cotton, that is less than 10 percent is lying with the growers, and any intervention in such a situation would neither be prudent for cotton market nor would benefit the growers/farmers.The ECC decided that the policy of free market should continue and let market forces define the prices of cotton in the country.

Karachi Cotton Association (KCA) and All Pakistan Textile Mills Association (Aptma) had also opposed government intervention in the cotton price mechanism.

The ECC deferred a summary moved by the Ministry of Water and Power for the levy of GST on hydro electric power sector because of prevailing confusion.

The meeting directed the Ministry of Water and Power to bring the summary, after improvement, in the next ECC meeting with presentation by Wapda Chairman who was major stakeholder in the issue.Taking cognisance of the matter pertaining to payments to sugar millers by the TCP, the ECC directed TCP Chairman, who was not in the meeting, to apprise the Cabinet Division and Finance Division on daily basis about payments made to the millers.

Courtesy: Business Recorder

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