Sugar cartel misleads govt with exaggerated figures

ISLAMABAD: The powerful sugar cartel of the country has once again started misleading the government with the exaggerated figures to allow them the sale of 400,000 tons more sugar abroad, sources said on Friday.

“In Pakistan, the sugar industry has turned into a ‘political industry’ as most of the producers and sellers of the commodity are sitting in the parliament and has once again approached President Asif Ali Zardari to allow them 400,000 tons of sugar export,” the sources said.

“Pakistan Sugar Mills Association (PSMA) has pleaded that this year production will be in surplus, so it may be allowed to export the commodity,” official sources told The News.

“President Zardari was quick to accept the association’s demand and directed the ministry of industries to send a proposal of the same quantity to the Economic Coordination (ECC) of the Cabinet for approval,” the sources added.

Earlier, the ministry of industries and production and the ministry of food and agriculture used to carry out an independent exercise to assess the expected production of sugar in the country, but now in the absence of “cross-check” mechanism, the government is solely depending upon the production figures of PSMA, which could mislead the government to take a wrong decision that ultimately could affect the consumers, the sources said.

“We had already facilitated the PSMA with Rs20-22 billion during this season by lifting three-year sugar export ban and allowing them 100,000 tons sugar export in January at Rs60 per kilogram and the Trading Corporation of Pakistan (TCP) procuring 0.478 million tons of sugar from PSMA, but now the association is again demanding more,” the official sources said.

The government had imposed a ban on the sugar exports in 2009 due to reduce output that jumped up the prices to Rs125 per kilogram.

The ministry of industries on its own has estimated 4.6 million tons sugar production, while there is also 0.2 million tons carryover stock of last year. Of these, 0.1 million tons had already been exported and 0.478 million tons was procured by the TCP.

When contacted, Javed A Kayani, chairman of the PSMA, said, “Yes, we met President Asif Ali Zardari, but did not ask him to allow the export of 400,000 tons of sugar, however, we requested him to persuade the Trading Corporation of Pakistan (TCP) to procure this quantity from the PSMA for its strategic reserves, as we could then be able to retire the outstanding amount of the growers.”

Kayani said that the mills owe around Rs30 billion to the growers in Punjab, Sindh and Khyber-Pakhtunkhwa. The TCP can procure more to maintain its strategic reserves. Last year the corporation imported 1.1 million tons of sugar, he said.

There are ‘advocates’ of the sugar mafia in the ministries and the political circles who could influence the government for the export permission.

“There is no harm and the government should allow sugar export to earn millions of dollars for the country, the sources in the ministry of production said.

But according to trade experts, sugar exports at this point is not a feasible option, as the international market is depressed. Instead of export, the TCP should procure it as it will be better for the consumers.

Currently, the TCP has stocks of 0.487 million tons of sugar and an additional 2,000 tons of the last year.

source: thenews