ISLAMABAD, Jan 27: The Economic Coordination Committee of the cabinet directed the Trading Corporation of Pakistan on Tuesday to increase sugar supply to utility stores from 40,000 tons a month to 100,000 tons.

The step is expected to reduce the price of sugar, which has risen to Rs45 per kg in the open market, to Rs38 per kg at utility stores.

The TCP has a sugar stock of about 400,000 tons.

A decision to import raw or refined sugar will be taken in a few days after consultations with stakeholders. The new cane crop is estimated to be 20 per cent less than the last harvest.

The ECC meeting, which was presided over by Adviser to the Prime Minister on Finance Shaukat Tarin, directed the ministry of food and agriculture and other organisations to complete procedural formalities for sugar import and keep an eye on market trends.

The committee approved recommendations of the Federal Board of Revenue’s Tariff Anomalies Committee (incorporating Engineering Development Board’s input) for modification in duties on six items, like yarn, glassware and cryogenic tanks.

The ECC directed the FBR to incorporate views of other government sections while finalising recommendations on certain issues to be submitted for consideration in the next meeting.

The meeting approved finance division’s summary allowing Mari Gas Company to remit $7.660 million over the next two years for investment in a prospective block in Yemen by taking 20 per cent share under a joint venture covered by ECC’s umbrella approval, which permits equity-based investment abroad by resident Pakistanis to liberalise the economy and deregulate control over foreign exchange.

The ECC considered economic affairs division’s proposal on recovery of foreign currency loans from private sector and directed it to incorporate the input of the technical committee constituted under the minister for Kashmir affairs, complete its homework based on fiscal calculation, incorporating exchange rate cover and resubmit its recommendations in the next meeting.

It reviewed key economic

indicators and overall price situation and noted that overall consumer price index-based inflation had registered a deceleration of 1.4 per cent in Dec 2008, compared to the same month in the previous year.The ECC noted that inflationary pressures were likely to ease in a few months because of sharp decline in commodity prices, particularly of POL and palm oil.

The wheat stock position during third week of Jan 2009 amounted to 1.960 million tons which was considered adequate to meet domestic requirements.

The meeting noted that foreign exchange reserves in Jan 2009 stood at $10.2 billion that included IMF’s first tranche disbursement and other positive inflows.

It noted that overall workers’ remittances during July-Dec 2008 amounted to $3.640 billion, showing an increase of 18.7 per cent over the same period in the previous year.

The foreign direct investment during July-Dec 2008 amounted to $2.327 billion, registering a growth of 12.6 per cent over the same period in the previous year.

The committee was informed that the FBR had collected Rs552.5 billion during July-Dec 2008, posting an increase of 27 per cent over the same period in the previous year.