Ban imposed on release of inland subsidy on sugar export

MUSHTAQ GHUMMAN

Caretaker Minister for Commerce and Textile Industry, Maqbool H H Rehmatoola has reportedly imposed a ban on release of inland subsidy on export of sugar as well as the subsidy under the Strategic Trade Policy Framework (STPF) 2009-12 and 2012-15, well informed sources told Business Recorder.

The Economic Co-ordination Committee (ECC) of the Cabinet, under the three-week long leadership of former Finance Minister, Saleem Mandviwalla, approved billions of rupees of financial incentives for politically influential sugar industry under the guise of inland subsidy on a summary moved by the Commerce Ministry.

However, the decision, considered questionable could not be implemented; several decisions taken by Saleem Mandviwalla are currently being heard by the Supreme Court of Pakistan. "Commerce Minister believes that the amount of inland subsidy can be used in elections, which is why he imposed a ban on the release of the amount under this head," the sources added.

Likewise, processing of cases of release of subsidy to exporters as announced in STFP is to be discontinued by the Trade Development Authority of Pakistan (TDAP). The Minister feels that TDAP should not release any amount under that head as it would be considered against the directives of Election Commission of Pakistan. The officials in TDAP and Trading Corporation of Pakistan (TCP), who intended to expedite cases of sugar mill owners and exporters for release of subsides were likely to be disappointed with that decision, said an official on condition of anonymity.

The sources said ECC in its meeting on March 6, had approved inland subsidy of Rs 1.75 per kg on 1.2 million tons of sugar. Earlier, the ECC meeting presided over by former finance minister Abdul Hafeez Shaikh had approved Rs 8 billion incentives on export of 1.2 million tons of sugar on summaries prepared by the Commerce Ministry and the Federal Board of Revenue (FBR).

However, SRO issued by the FBR favoured only sugar mills of Sindh zone. According to sources, Punjab produces 60 percent and KP 10 percent of overall sugar output in the country. The exclusion of both provinces has been strongly lamented by the industry as the SRO only favours one province. This SRO is being challenged in the court as discriminatory in nature and the major quantum of growers'' payments relates to Punjab. If KP and Punjab mills try to export through Karachi Port for destinations other than Afghanistan and CIS, it costs over 20 dollars in terms of haulage and it is practically impossible to export. According to sources, Secretary Finance Dr Waqar Masood has decided that the issue of release of inland subsidy should be left to the new elected government.

^{Source Business Recorder}

Read More

Pakistan and Tajikistan Sugar Trade

Tajikistan has set new conditions for the import of sugar from Pakistan and now it is seeking a price of $20 less than international market instead of already agreed price. For last eight months, Pakistan and Tajikistan are negotiating to mature a sugar export deal, however, the deal is still pending despite several correspondences.
Sources told Business Recorder on Monday that once again Tajikistan has declined to accept Trading Corporation of Pakistan''s (TCP) commercial agreement for export of 30,000 tons white crystal sugar and has set some new conditions for the import of sugar. Following refusal of TCP''s commercial agreement, much awaited sugar export deal between Pakistan and Tajikistan has been further delayed. About one month back, amended commercial agreement for export of sugar was sent to Tajikistan officials for their signature. The second commercial agreement was drafted in consultation with Tajikistan and as per their demand Pakistan had agreed to supply sugar in three tranches instead of a single tranche of 30,000 tons.
However, now Tajikistan has declined to accept TCP''s second commercial agreement as is not willing to procure complete quantity of sugar through three consignments, sources said. Instead of accepting and signing commercial agreement sent by TCP, Agency on State Material Reserves of Tajikistan has asked TCP to reduce the agreed price of the commodity and minimise the consignment quantity by 50 percent.
In recent correspondent with TCP, Tajikistan''s procurement agency has refused to get supply of 10,000 tons in three tranches and now seeking sugar procurement in six phases. "Now, Tajikistan has requested for supply of sugar in six tranches with each tranche of 5,000 tons. At the same time, they are demanding a price of $20 less than international market instead of already agreed price of $528 per ton," they added.
In the second week of August last year, in the presence of Minister for Commerce Makhdoom Amin Fahim and Nurmahmad Akhmedov Chairman Agency on State Material Reserves of Tajikistan, Pakistan and Tajikistan reached a sugar export deal, under which Pakistan will supply 30,000 tons of white refined crystal sugar to Tajikistan at a discount price, which will be some $20 lower than international market. A price of $528 per ton was fixed for export as at the time of negotiations international price stood at $548 per ton.
With Tajikistan''s new demand, much awaited sugar export deal between two countries has further delayed and now it is being expected that sugar export deal will take some months to mature, sources said. Talks for export of sugar to Tajikistan are in process for last eight months, but continued to delay due to some disputes.
Earlier, there was some confusion on the transportation expenses and later the variety of sugar as during the initial talks, Tajikistan had agreed to import white refined crystal sugar, while later it demand powdered sugar, which is costlier than crystal sugar. TCP has already made all arrangements to start sugar export to Tajikistan and some 30,000 tons of stocks of white crystal sugar have already been allocated for export purposes.

Source: Business Recorder

Read More