Sugar import duty cut, export regulatory duty on the cards

KARACHI, The government is considering to decrease the present 25 percent duty on import of sugar and, at the same time, impose regulatory duty on its export, which at present enjoys zero duty to contain cartelisation which has resulted in the hike of sugar prices.

Incidentally, as per the tests carried out by Pakistan Standards and Quality Control Authority (PSQCA) designated laboratories, the ecumza and sulphur dioxide levels are more than the internationally permissible limits including limits imposed by PS standards in the sugar manufactured by local mills as well as imported earlier from India.

The Trading Corporation of Pakistan (TCP) has invited offers, by August 19, from sugar mills in Pakistan for purchase of 50,000 tons white crystal/refined sugar, which must conform to the Pakistan Standards. Sultan Awan, General Manager, TCP, told that the sugar samples would be sent to designated laboratories for tests and purchase orders would be placed if the commodity conforms to the laid down Pakistan Standards.

In the recent past, tests conducted at PSQCA-designated laboratories, sugar samples had failed to conform to Pakistan Standards. According to official sources, Pakistan industry in general is not willing to comply with the standards for product quality control notified by PSQCA. In the case of sugar, Pakistan Sugar Mills Association (PSMA) has conveyed its unwillingness to the national body to standardise its products for quality conformance.

However, sugar manufacturers, sensing competition from import-based Indian sugar, considered domestic sugar necessary for becoming part of mandatory list of products for compliance of product quality control. This non-tariff barrier equally could apply for import-based sugar to conform to the standard notified for sugar by PSQCA. This was probably in the mind of local sugar industry to attempt stopping clearance of imported Indian origin sugar, sources said.

The Ministry of Science and Technology, in consultation with Minfal, had suggested declaring sugar manufactured in Pakistan as part of the compulsory list to comply with the standards. Sources said the sugar industry sought this refuge of compulsory licensing to block imports of Indian sugar, claiming it to be of lower standard than notified by PSQCA. But now it is dragging its feet and is not willing to comply with the PS standard even in the interest of consumers in order to save the service charges which PSQCA would charge on account of testing of sugar to confirm the quality and standard.

Sugar industry also feels that continued surveillance of its quality by PSQCA may at times question the quality of the product for sale which otherwise is prohibited for sale in the market if found of lower quality than the prescribed standards notified by PSQCA.

Interestingly, the local sugar industry challenges the quality of imported Indian sugar for being of lower quality, but is not willing to offer its product for quality control against the laid down and notified standards by PSQCA, sources said.

They further elaborated that the sugar industry in addition to managing the external protections through tariffs and paratariffs is also unwilling to honour government decisions to abide by purchasing sugarcane at the agreed prices between sugar manufacturers and cane growers. The complaint by abadgaar boards is that the sugar industry does not pay price of the sugarcane as per the agreed formula through intervention of government. It wants to retain profits for the industry and does not believe in sharing the benefits to the chain supply in which agriculture farmers are the necessary party.

source:pakwatan