ISLAMABAD : Dec 7, 2022: Pakistan is almost close to miss an opportunity to earn $ 650 million plus at a time when its facing a default-like situation on its international obligations due to fast eroding reserves as the federal government is not picking up courage to take a decision in the national interest and allow export of surplus sugar .
Rather , Shahbaz Sharif led federal government is preferring politics over a pure economic decision .
The government decision makers apprehend that the decision of allowing export of sugar would result in increase in its rates in the local market and it may result in inviting criticism from the Pakistan Tehreek e Insaf (PTI) .
With this fear, the federal government has wasted almost one and half months , which was a critical time to take a firm decision and allow export of surplus sugar to earn much -needed forex exchange, in discussions and abortive meetings .
Despite having four weekly meetings with sugar industry representatives in the last one and half months, National Food Security minister , Tariq Bashir Cheema, remained inconvinced that the industry has surplus stocks of one million tons .
Tariq Bashir Cheema did not even trust in the Federal Board Revenue (FBR) statistics , which in its report based on track and trace system, had confirmed in one of four meetings of the Sugar Advisory Board that a surplus stock of one million tons was available with the industry as of November 25 last.
Tariq Bashir Cheema, instead taking a prompt decision and submit a summary to the Economic Coordination Committee (ECC) of the federal cabinet for approval of export of surplus sugar stocks of one million tons, preferred politics He had conveyed to the sugar industry representative in a Sugar Advisor Board meeting held in last week of November last in Islamabad that he would prefer to resign as Food Security minister over submitting a case to the ECC for export of surplus sugar stocks.
“The officially verified figures show the industry has one million tons sugar stock and with such a huge surplus going into a fresh crushing would simply mean devastation of all stakeholders of sugar sector – the sugar industry , the growers and the government itself .
In the case , the government remains hard to its position and does not allow export of surplus sugar it would not guarantee the farmers good price of their crop. It will add burden on the industry and push it to default on payments to the growers and banks loans . Thirdly , the government will lose taxes in billions if the industry picks up losses.
The government has fixed Rs 300 indicative price of sugarcane per maund (40 Kg) for crushing season 2022-23 and this will increase cost of production of sugar to Rs 115. At present ex factory sugar price of sugar is around Rs 90 a kg. This equation is very simple and it shows a difference of Rs 25 per kg.
National Food Security minister should have a clear idea that the industry can not afford to run at such a loss of Rs 25 per kg. Export of surplus stock of one million tons is only solution to the complex situation. It will help the government get $ 650 plus in forex exchange and protect the industry from more glut, besides ensuring at least officially announced support price of Rs 300 for 40 kg sugarcane to the growers.
Tariq Bashir Cheema should shun his policy of doing politics over national interest and take practical step to pave way for export of one million tons sugar and ensure a win, win situation for all stakeholders of sugar sector.
