ISLAMABAD: The federal government has given in to pressure from sugar mills, which are mostly owned by parliamentarians irrespective of party affiliation, and has shelved plans to import sugar on government-to-government basis, a senior official said on Friday.
“The government has shelved plans to import 700,000 tons of sugar on deferred payment from the UAE after mounting pressure from the sugar barons,” a government official, who asked not to be named, told The News.
First, the sugar barons wrote a letter to the prime minister through the Punjab Chief Minister Mian Shahbaz Sharif, asking the government to buy the sweetener from the local millers to clear farmers’ arrears of Rs35 billion, said an insider of the sugar industry.
Second, the Pakistan Sugar Mills Association requested the government to impose a 35 per cent regulatory duty on the import of sugar, saying there was sufficient quantity of the commodity available in the local market. They claimed a glut of sugar would lead to its smuggling to other countries.
The state-run Trading Corporation of Pakistan (TCP) is trying to build strategic reserves of half-a-million tons, and on Friday also it floated a tender for purchase of 200,000 tons.
The TCP has awarded contracts for supply of 150,000 tons of sugar in previous four tenders. It has awarded the contracts to The Sadan General Trading, Dubai for 50,000 tons at $585 a ton, Agrocrop International for 50,000 tons at $779.95 a ton, again to The Sadan General Trading, Dubai for 50,000 tons at $649 a ton. It has awarded a contract for supply of 200,000 tons of sugar to Al Khaleej Sugar Co, Dubai at $596.10 a ton.
After refusal of the private sector to import 750,000 tons of sugar despite exemption from excise duty and sales tax, the Economic Coordination Committee (ECC) of the Cabinet had asked the TCP to import that quantity of sugar on government-to-government basis.
Estimates made by the ministry of industries and the ministry of food show that the government should import 1.25 million tons of sugar for the current season, from November 2009 to October 2010, as local production will be around three million tons. The country’s consumption is estimated at 4.2 million tons.
On the sidelines of a meeting with high-ups of the International Monetary Fund in mid-February in Dubai, finance ministry officials had talks with their UAE counterparts on import of 700,000 tons of sugar.
“Under the present circumstances, sugar import from the UAE on government-to-government basis is unlikely. The imported quantity of sugar will be sufficient to meet the country’s needs till the start of the next crushing season from Nov 1,” an official of the ministry of commerce said.
After the Utility Stores Corporation (USC) failed to procure a single gram of the sweetener from local mills, the ECC tasked the TCP with procuring half-a-million tons of sugar for the USC.
Source: http://www.thenews.com.pk/daily_detail.asp?id=232295
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