The federal government has decided to allow export of 400,000 tons of sugar through sugar mills despite the fact that the mills did not utilise their previous quotas allocated by the ECC, sources close to the Secretary Industries told Business Recorder.
The proposal will be placed before the Economic Co-ordination Committee (ECC) of the Cabinet in its next meeting to be presided over by the Finance Minister Dr Abdul Hafeez Shaikh.
“Millers expended all of their energies to influence the Ministries through the Awan-i-Sadar and Prime Minister Secretariat for ensuring approval to export 400,000 tons sugar, now just a formal stamp of the ECC is required,” the sources added.
In recent meeting of Sugar Advisory Board (SAB) presided over Secretary Industries, Executive Director, SBP, Muhammad Ashfaq Khan revealed that PSMA also exported 109,000 tons of sugar physically against the quota of 290,000 tons allowed in accordance with previous ECC decisions.
The sources said Ministry of Commerce moved a summary for export of 0.4 million tons of sugar to the ECC. However, the ECC approved export of 0.2 million tons in addition to leftover quota of already approved export and placed export quota restriction of 10,000 tons per sugar mill and constituted a committee, comprising Prime Minister”s Special Assistant (convenor) and Secretaries of Cabinet, Commerce and Industry to negotiate with the sugar mills with a view to encouraging them to utilise the already approved quota for export.
Pursuant to the ECC decision, the committee held a meeting with the representatives of Pakistan Sugar Mills Association (PSMA) on October 24, 2012 in the Cabinet Division to see how to utilise the unused portion of quota, already allocated to different sugar mils for sugar export.
According to sources, the following was unanimously agreed: (i) unutilised or partially utilised quota of the sugar allowed export in accordance with ECC”s decision of January 31, 2012 for 100,000 tons and 200,000 tons of sugar allowed export on May 15 this year may be cancelled; (ii) all sugar mills can apply for the export of sugar from this quota, subject to the condition that an undertaking be given that they have the required quantity of sugar for export; (iii) the quota of sugar shall not exceed 10,000 tons per mill and this shall include the quantity as allowed to the mills out of 200,000 tons of sugar, already approved for export in accordance with SBP circular letter No 08/EPP.1(51)-sugar-2012 issued on October 19, 2012; (iii) this exercise has been undertaken to improve the liquidity position of the sugar mills so that the growers are paid in time and at the rate fixed by the government; and (iii) the export of unutilised/ partially utilised quota of sugar under the new authorisation shall be 135,834 tons and has to be exported with 45 days from the date of SBP circular. The extension in the time period of export, if required, will be allowed to such consignments in which confirmed irrevocable letters of credit have been opened with 45 days.
The Special Assistant to the Prime Minister, in a letter, stated that the Ministry of Commerce”s summary to the ECC seeking approval for the export of 400,000 tons in total, of which export of 200,000 tons was allowed on October 3, 2012. He suggested that unutilised or partially utilised quota of 135,834 tons (total 335,834 tons) of sugar may be allowed for export as per criterion. He also recommended that the approval of additional 64,166 tons of sugar be in consonance with the purpose of sugar export which is to increase liquidity in the sugar industry for payments to growers. Thus total sugar export quota will be 400,000 tons.
Ministry of Industries had revealed that the export of 0. 2 million tons of sugar be made and noted that out of 300,000 tons of already allowed sugar export, only 100,000 tons has been exported, meaning thereby that 400,000 tons of sugar may be exported including quantities allowed to be export earlier but not exported.
“ECC will approve export of 400,000 tons of sugar (200,000 tons already approved), plus unutilised or partially utilised export quota of sugar of 135,834 tons (already approved) plus 64,166 tons,” the sources concluded.