ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Friday directed the Trading Corporation of Pakistan (TCP) to move swiftly to import 200,000 tonnes of wheat and decided to reduce sales tax and duties on import of sugar to control rising prices in the country.

Official sources, who attended the meeting, told Dawn that the government appeared to be facing challenges in controlling prices of the two essential commodities, sugar and wheat, in that order through imports.

The sources said the Ministry of Industries tried to pass on the responsibility for sugar import to the Ministry of National Food Security and Research (MNFSR) after inviting bids that did not turn out to be encouraging.

Under pressure from the top office, the MNFSR was compelled to move a summary for reducing sales tax and duties on sugar import without mandatory approval of its minister, Syed Fakhar Imam, but declined to take over responsibility from the industries ministry at the eleventh hour.

The meeting presided over by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh allowed the TCP to place an order for the import of 200,000 tonnes of wheat in the public sector for PASSCO after the MNFSR Secretary Omar Hamid Khan reported that 500,000 tonnes of wheat was also being imported by the private sector and the first shipment was already scheduled to reach the country’s port on August 26, followed by September 4.

He hoped the arrival of 700,000 tonnes of wheat in the next couple of months would help defuse price volatility, overcome shortage and discourage hoarding of this essential commodity in the country.

The ECC asked Minister for Economic Affairs Makhdoom Khusro Bakhtiar and Secretary Omar Hamid Khan to consult the provincial governments whether they would like to purchase any amount of wheat at the rates offered to TCP by global suppliers since the global wheat prices generally remain on the lower side in the months of July and August.

The MNFSR had proposed a release price of Rs1,600-Rs1,700 per 40kg of wheat to provinces but Dr Shaikh believed the will of the provincial governments should be known first because they may like to have their own import arrangements or purchase from TCP at import plus TCP’s incidental and handling charges.

An official statement said the government had already allowed the TCP to import 1.5 million tonnes of wheat through a transparent open international bidding process to meet the identified demand of 0.7 million tonnes of wheat by Punjab, 0.3 million tonnes of Khyber Pakhtunkhwa and 0.5 million tonnes required to replenish the strategic reserves of PASSCO.

The wheat would be imported in a staggered manner to fetch the best price as well as to save carrying cost and meet the shortage as and when required.

The meeting noted that wheat stocks to the tune of 26.05 million tonnes, including 25.457 million tonnes from fresh wheat produce and 0.602 million tonnes of the carry forward stocks were currently available in the country, reflecting a shortfall of 1.411 million tonnes. The availability of wheat stocks in the public sector was reported at 6.32 million tonnes compared to 7.55 million tonnes during the corresponding period last year.

The ECC also took up a proposal for the import of sugar through the private importers in view of fast depleting stocks of sugar which currently stood at 1.2 million tonnes but were likely to exhaust by early November 2020, the statement said.

The ECC decided to reduce the levy of sales tax and other duties on the import of sugar by private importers to keep the landed cost at the lowest possible level to allow a fair and affordable price to the consumers.

The MNFSR told the meeting that ECC had allowed import of 300,000 tonnes of sugar through TCP on a summary of the Ministry of Industries which was also ratified by the cabinet on August 4.

On August 10, the tenders were invited which attracted five to six companies but only one of the bidders was acceptable given the quality of bids.

The MNFSR secretary protested that his ministry was being dragged into the sugar import even though the entire wherewithal belonged to the industries ministry, including sugar council, cane commissioners, Pakistan Sugar Mills Association and TCP.

After heated discussions between the secretaries concerned, Minister for Industries and Production Hammad Azhar agreed to complete the sugar import process.

The ECC also took up the issue of waiver of demurrage charges worth about Rs4bn on Afghan Transit Trade cargo stranded at Karachi ports in view of the matter being a Force Majeure and the past three instances of similar waivers, and asked the Ministry of Maritime Affairs to take up the issue with the port authorities and terminal operators for its amicable resolution.

On a proposal by the Ministry of Energy (Petroleum Division), the ECC took up the issue of Jamshoro Joint Venture Limited (JJVL) expired agreement with Sui Southern Gas Company Limited (SSGC) and gave principled approval for resumption of LPG/NGL production from the JJVL plant under proposed conditions subject to their endorsement from the Office of the Attorney General.

Rationale behind the decision was to reduce the import of LPG when domestic production was possible.

The ECC also discussed and approved a proposal by the Finance Division for fixation of dividend on SBP shares and allowed the bank to provide dividend at the rate of 10pc on face value of SBP shares in the bank’s annual accounts for the year ended June 30, 2020.

Published in Dawn, August 22nd, 2020