PSMA urges government to impose 25 percent regulatory duty on sugar import

SLAMABAD : The Pakistan Sugar Mills Association (PSMA) has urged government to impose 25 percent regulatory duty (RD) on imported sugar to save the local sugar industry from collapse, and take stern action against the middleman. In a letter dated January 10, 2011, to the Minister for Industries and Production (MoI&P), Hazar Khan Bijarani.

PSMA Chairman Javed Kayani stated that since the inception of crushing season 2010-2011 the price of sugarcane has risen phenomenally, thereby causing corresponding increase in the cost of production of sugar. PSMA foresees a production of about 3.7 million tons to 3.8 million tons of sugar at the end of the crushing season which implies that the government has to import only 0.4 million tons of sugar.

"As against sugarcane support price of Rs 125 per 40 kg in Punjab/KP and Sindh at 127 per 40 kg the prevalent price is hovering above 250 per 40 kg level, primarily because of the role of middlemen who are playing havoc with the growers and industry," he added. According to PSMA, middlemen have taken over the supply of sugarcane and are fleecing both the farmers and the industry and no concrete steps have been taken by the government to take care of this issue despite their representation at all fora.

Sugar cost of production at current prices of sugarcane is Rs 85 ex-mill approximately. "We apprehend that after the close of crushing season our cost of production would perhaps end up even higher and in the event of cheap and substandard sugar from India the local sale of sugar would come to a halt, which will adversely affect the payments to growers," Kayani said.

Media reports suggest that India intends to export its surplus this year by taking advantage of zero tariff on sugar, and dump it in Pakistan. Pakistan's cost of production is far higher than India, in view of their controlled sugarcane prices with 12 percent recovery. "PSMA is neither getting sugarcane at the government's announced support price nor having the inherent advantage of recovery whereas only the lower price of sugarcane and higher recovery can translate into lower cost of production of sugar," Kayani added.

Sugar prices in the international market are also volatile and follow the speculative trend and oscillate accordingly. "We request the federal government to take cognisance of the matter and act to protect the interests of the growers and save the industry from the impending disaster of importing sugar. Provinces should be directed to take stern action against middlemen as we still have almost two-and-a-half months remaining of the current crushing season," Javed said. Earlier, the PSMA had urged the government to place Indian sugar on negative list, but concerned quarters did not support this suggestion. PSMA's delegation is also expected to meet the Industries Minister to justify 25 percent RD on imported sugar.

source:brecorder