ISLAMABAD, Dec 11: Anticipating bumper sugar production this year, the Economic Coordination Committee (ECC) of the cabinet on Tuesday decided to purchase 330,000 tons of the commodity from mills for strategic reserves and allow export of 1.2 million tons to ease cash flows for growers and millers.

Presided over by Finance Minister Abdul Hafeez Shaikh, the meeting turned down a request by the Pakistan Sugar Mills Association to procure 1m tons of sugar for strategic reserves through the Trading Corporation of Pakistan (TCP).

Given the fact that the TCP still had over 177,931 tons of surplus sugar after meeting the requirement of the Utility Stores Corporation, the ECC decided to purchase an additional 330,000 tons from mills to maintain a strategic reserve of 500,000 tons for the next year.

The ECC also allowed the export of 500,000 tons of additional sugar against the irrevocable letter of credit or contract with 10 per cent advance payment to be shipped in 90 days of the registration with the State Bank of Pakistan, in addition to the already allowed export of 700,000 tons as per its previous decisions.

It was informed that current stocks of sugar in the country stood at about 1.5m tons. A total of 4.7m tons would be produced during the sugar season 2012-13. A total of 5.9m tons of sugar was expected to be available for the consumption year 2012-13 against the annual domestic consumption of 4.2-4.3m tons.

As such, there would be about 1.7-1.9m tons of surplus sugar available in the country during 2012-13. Upon request of PSMA, the ministries of commerce and industries had recommended to enhance the limit of strategic reserves from 500,000 tons to 1m tons. The ECC, however, decided to continue with a strategic reserve of 500,000 tons.

The meeting was informed that the TCP had procured 687,000 tons of sugar for the current year. Delivery orders for 509,069 tons had been issued to the USC and other agencies till November 2012, leaving a balance of 177,931 tons for allocation. The TCP was releasing about 50,000 tons of sugar to the USC each month, suggesting that the stocks would last till March 2013.

The ECC decided to abolish export quotas it had earlier fixed for various mills because most of them had failed to export the commodity or partially exhausted their export quotas. In view of the availability of sugar in abundance, the meeting decided to allow exports by mills without any quota.

GAS PRICE PROPOSAL: The meeting approved in principle a proposal of the ministry of petroleum and natural resources for renewal of the gas price agreement between Qadirpur Joint Venture and Sui Northern Gas Pipelines Limited, subject to clearance by the law ministry, so that the revised pricing agreement took effect from July 1, 2013.

The ECC also allowed a request of the petroleum ministry for purchase of Tullow Pakistan Development Limited and Tullow Bangladesh Limited by Pakistan Petroleum Limited as a strategic corporate consolidation, provided the deal was approved by the SBP.

The meeting gave ex-post-facto approval to the Rs187m subsidy provided to USC for supply of cheaper wheat flour to people during Ramazan.

It decided to hold a meeting shortly to consider issues about loadshedding of gas and electricity and to devise a mechanism to minimise effects of energy shortage on different segments of society.

ECONOMIC INDICATORS: The meeting was informed that year-on-year inflation based on the consumer price index, sensitive price index and wholesale price index had stood at 6.9pc, 7.6pc and 7.3pc, respectively, until the end of November. It noted with satisfaction that year-on-year inflation in Pakistan had remained the lowest among the regional countries.

The meeting was told that current stock position of wheat, sugar and fertiliser was satisfactory and that exports had registered a 1.3pc growth in the first four months of the current financial year while imports had declined by 2.2pc. The remittances by overseas Pakistanis increased by 15pc and net revenue collection was 7.7pc higher than last year.

The meeting expressed satisfaction over a phenomenal growth in Karachi Stock Exchange 100 Index during the current fiscal, showing a 21.8pc growth in the first five months — highest in the world, an official statement said.