KARACHI: The Pakistan Sugar Mills Association (PSMA) Sindh chapter has claimed the dollar-strapped Pakistan can fetch up to $1 billion by exporting the minimum 1.3 million tonnes of surplus sugar, currently stocked in local go-downs, this year till November 30. Addressing a Press Conference the PSMA Sindh chapter Chairman Zaid Zakarya urged the government to allow the export of the surplus sugar and assured that the local price of the commodity will not be increased from the government notified rates: Rs84.50 per kilogram. He said the county posted a record 8 million MT of sugarcane production this year, while the total local consumption is not more than 6.5 million MT.

He warned that if the government did not allow the export of the said commodity, many sugar mills might close due to a financial crunch and will not be able to sell new sugar because of surplus stock, and payments for the farmer could not be made. The delayed decision would cause a huge financial crisis for farmers and the rural economy, and it would lead to catastrophe in the 2024 season. Commenting on his arguments the local consumer associations and analysts have strongly opposed the thought of exporting sugar just to earn the foreign exchange of $1 billion. They said this export racket has badly damaged the credibility of the sugar millers and exporters during the past many years of the PTI regime when the shortage in the local market was created after exports and the same sugar was imported at much costlier prices expending twice the foreign exchange that was earned through export lollipop. 

It may be recalled that black market price from local consumers was charged up to Rs 150/- per kg by these hoarders that were sold @ Rs 55/- per kg in the PML-N regime. They said the government may have fixed the present price @ Rs 84.50 per kilogram as PSMA says but the retail sellers are still charging up to Rs 100/- per kg but nobody cares in the administration.       

It may be mentioned here that in June this year the Sindh High Court (SHC) directed the Pakistan Sugar Mills Association (PSMA) and 26 sugar mills to deposit 50 percent of the amounts of respective penalties imposed upon them by the Competition Commission of Pakistan (CCP) in the sugar cartelization case. The penalty imposed by the Commission, which is the highest to date, was approximately Rs. 44 billion (approximately above USD 265 million) (based on the calculation of 55 mills’ 2019 turnover figures, including consolidated turnover figures for same group mills, available with the Commission.

In 2021, the CCP conducted an inquiry against PSMA and its member undertakings for the prima facie violation of Section 4 of the Competition Act, 2010. As part of the inquiry, the CCP also conducted searches and inspections at two premises of PSMA and of one of the sugar mills and impounded the proof of their involvement in cartelization. The Enquiry Report concluded that PSMA and its members had breached Section 4(1), 4(2), and 4(2)(c) of the Act, which was followed by the issuance of show cause notices and extensive hearings into the matter. 

Published in The Daily National Courier, August, 30 2022

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