LAHORE: The prices of sugar would rise further in the coming days, as the measures and commitments made by the government to control the sugar prices has not been fulfilled, sources in the industry told Daily Times on Friday.

The price of sugar has crossed Rs 65 to 70 per kg in many cities while sugarcane is available for Rs 170 to 190 per 40 kg. The importers are also not willing to import sugar due to current situation in the country. Interestingly, the high sugarcane prices are not helping the farmers in boosting their profits, as the middlemen are involved in the process and are fully exploiting them. The sugar mills are receiving less sugarcane while the farmers are lamenting on not achieving their desired prices. Currently, only a meagre 40 percent sugar mills are running on full capacity due to non-availability of sugarcane, which would result in low sugar production.

The sources said the government has promised the stakeholders to curb smuggling of sugar in disguise of gur to Afghanistan and linking of sugarcane price with sucrose content.

The sugarcane production remained low in the country, which also resulted in high prices. Interestingly, the farmers are not making money and the middlemen involved are minting money. They are buying sugarcane from the farmers at the rate of Rs 100 to 110 per 40 kg and after stocking and mixing it with waste material they are then selling it to the mills, which ultimately would decrease the sucrose content.

The government is expecting a shortfall of one million tonnes, as there would be production of 3.2 to 3.4 million tonnes, however, looking at the current situation there would be a shortfall of more than one million tonnes and it might remain at 1.2 to 1.4 million tonnes.

Pakistan Sugar Mills Association (PSMA), Chairman Iskander M Khan said the measures announced by the government have not been implemented and it would play havoc with the sugar prices in the coming days. He said the sugar mills are getting sugarcane at higher prices and it would in turn lead to a boost in the sugar prices. He said the government should immediately ban the gur export to Afghanistan to save the local market.

The international price of sugar has also increased drastically and touched $ 750 per tonnes and adding freight charges it would be $ 790 per tonnes at Karachi port. If US dollar remains at Rs 85 then the price would be more than Rs 67 per kg and adding sales tax the price would cross Rs 75 per kg.

The sugar importers are also frightened to import sugar, as in the past the crackdown by the government on sugar importers and dealers has created panic amongst them. “Last time, around 200 bags of sugar were confiscated and therefore I would not import sugar,” said a sugar dealer and importer Abdul Rauf adding that there is no guarantee that there would not be another crackdown.

Meanwhile, Pakistan Sugar Mills Association Punjab Zone Chairman, Javed Kayani has refuted allegations about alleged profit taking of Rs 8 billion through reduction of Sales Tax as the facts are contrary to what is being portrayed against the sugar industry.

He clarified that the amount of Sales Tax is the trust money of government, which is paid every month so the impression of making money through reduction of Sales Tax is ill founded as the incidence of Sales Tax is passed on to the consumers. The reduction of Sales Tax in the past was done to facilitate the consumers of this country and the industry does not benefit from reduction of Sales Tax at all.

He said the alleged amount of profit earned is all farce. The industry always remains compliant to regulations and contributes to the national exchequer all taxes and levies. He clearly stated that the sugar industry does not benefit from increase or decrease of Sales Tax.

Javed Kayani has said that sugar is an essential commodity presently being produced at a very high cost of sugarcane, which is in excess of Rs 200 per 40 kg. Any increase in the amount of Sales Tax would further add to the woes of the consumers of this country. The government should consider removing Sales Tax on sugar, he opined.

source: dailytimes

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