ISLAMABAD: Amid rising prices during the ongoing sugarcane crushing season, the government has decided to immediately allow import of almost 850,000 tonnes of sugar without any taxes and duties to prevent price hike.

This includes tax and duty free import of 500,000 tonnes of refined sugar through the public sector, besides an offer to the local sugar mills to import another 350,000 tonnes of raw sugar.

Informed sources told Dawn that the decision in principle came during a recent meeting held at the Prime Minister Office to review prices of essential commodities as part of a general situation on inflation.

They said a meeting of the Sugar Advisory Board — a forum of relevant ministries like commerce and industries — later firmed up recommendations for sugar import as the prices started going up within a few weeks after a decline.

Prime Minister Imran Khan had on Dec 12 publicly congratulated the relevant government agencies whose coordinated efforts helped reduce sugar prices to about Rs80per kg from well above Rs100. However, the prices went beyond Rs90 over the next few weeks, touching Rs100 per kg in Lahore and Karachi. This was reportedly based on speculations that sugar shortages could emerge by the end of September this year.

Officials said the government would ensure a total of about 850,000 tonnes of additional sugar in the market for price stabilisation. Of this, about 500,000 tonnes would be imported through the Trading Corporation of Pakistan (TCP) and the remaining 350,000 tonnes by the private sector i.e. sugar mills.

The Pakistan Sugar Mills Association had in recent weeks blamed the inability of cane commissioners to ensure the sugarcane price approved by various provincial governments, resulting in higher production cost and market rates.

Sugar price has almost doubled over the past two years from Rs60 in August/September 2018 to about Rs115 in August/September 2020, before going down slightly early last month.

Minister for Industries and Production Hammad Azhar on Sunday also confirmed the government’s move to import sugar. “Summary for import of 500k tonnes of sugar is being moved for upcoming ECC,” he said in a tweet, adding that “provisional estimates suggest local production of sugar will be higher than last season. But owing to low carryover stocks, TCP, in consultation with provinces, will be advised to initiate imports early”.

The minister also said the “provinces will be advised to release this sugar at retail stage at subsidised and control rates. Cane commissioners have reported ample supply of sugar and sugarcane for the time being”.

The officials said the commodity would be supplied to Azad Kashmir, Islamabad, Gilgit-Baltistan and Utility Stores Corporation (USC) through imports while the sugar mills would also be allowed to import raw sugar on a first-come-first-serve basis.

The sources said the Sugar Advisory Board had recently decided to exempt commercial import of sugar from duties and taxes under food security provisions of public procurement law, besides allowing import of 300,000 tonnes of raw sugar by the mills to beef up stocks in view of almost no carryover stock from the previous season.

The board had been informed that the total production last year (2019-20) was close to 4.9 million tonnes while the provincial governments and other agencies anticipated more than 5.5m tonnes production this year, which was almost 13.5 per cent (650,000 tonnes) higher.

However, the overall stocks last year were significantly higher in view of about 775,000 tonnes of carryout stocks. The carryover this year is almost nothing.

The sources said Punjab had flagged sugar shortage at the end (October/November) of current year even though a clear picture would be available after two months.

The sources said the industries ministry had recommended a reduction in withholding income tax to 0.25pc from 5.5pc on refined sugar and removal of 3pc sales tax on import of raw sugar.

Published in Dawn, January 18th, 2021