From YOUSAF RAFIQ
Special Correspondent, Islamabad
Feb 21 - 27, 2000
Pakistan may have to import sugar during the year 2000 in order to meet
its domestic requirement which comes to 3.2 million tons whereas the expected yield is
estimated at only 3 million tons due to an expected 20 per cent fall in sugarcane supply.
The Agriculture Price Commission (APC) in its report to the Federal
Government has disclosed that due to short production by 20 percent this year, country is
expected to yield only 3 million tons of sugar against local demand of 3.2 million tons.
The APC was asked by the federal government to give its comments on sugar export issue to
be submitted before the Economic Coordination Committee (ECC) of the Federal Cabinet which
is set to take a decision to the effect in its meeting scheduled to be held next week.
The Federal Ministry of Food, Agriculture and Livestock, earlier
submitted a summary to the ECC to get permission for sugar export of 50,000 metric tons to
keep Pakistan in the international market as a seller and help the mill owners to clear
all the dues of farmers on time. The Ministry had also sought Rs4500 per ton subsidy on
sugar export to the exporters as well.
The All Pakistan Sugar Mills Association is also pressing the
government not only for permission to export sugar export but also to give significant
subsidy on sugar exports. However, these sources said, the finance minister Shoukat Aziz
deferred the matter till the arrival of a report by a committee constituted for the
purpose to advise the government on this issue. Sources said the government at that time
had also sought comments from the Commission so that the decision could be taken in the
light of an expert opinion from the professional institution. "The copy of MINFAL
summary for the sugar export was also sent to the Commission for parawise comments,"
Sources said the Commission in its comments on sugar export issue,
pointed out that sugar industry at present can produce about 5 million tons of sugar with
the annual crushing season of 150 days provided sufficient supply of sugarcane is
available. It further said that annual production of sugar during last two years has
averaged at 3.5 million tons. However, it adds, in the current season given short supply
of sugarcane, sugar production is expected to be around 3 million tons.
Sources quoted the Commission as saying that at the average annual per
capita consumption of about 22 kg, current domestic requirement is estimated to be more
than 3 million tons. The Agriculture Price Commission has also pointed out that the ratio
of raw material cost of sugar may have increased to 58 per cent in view of increase in
price of sugarcane. "If excise duty is to be excluded from the cost calculation, the
ratio between raw material and processing costs works out at 66.34", the Commission
It adds that position relating to practice of delayed payment reported
in the subject summary is by and large true. To exploit the situation resulting from the
delayed payment, it adds, the middleman has also emerged in the marketing of sugarcane
with the connivance of sugar mills. "To check the delay in payments, the law needs to
be strictly enforced. The appointment of independent cane commissioner in Punjab can help
in addressing the grievance of the farmers and the problems of the sugarcane
industry", the Commission recommended to the government.
The commission said that continuous uncertainty about the pricing
situation is resulting in cob-web cycle like situation in sugarcane farming. "The
yearly fluctuation in area and production during the last 10 years established the fact
that this policy is putting negative effect on cane farming in the country," the
Commission report states.
It has further pointed out in its report that notwithstanding, the
needs to reduce layers of the middle man and control the big guns to discourage the cartel
like situation in sugar trade, the middle man be eliminated from the marketing system.
Finally, the Commission said the efficiency both of sugar production
and its processing into sugar by the mills is comparatively much lower in Pakistan. "
There is a considerable scope for the improvement on these fronts to lower costs of sugar
for the consumers", the report of Agriculture Price Commission states.