Caretaker Minister for Commerce, Industries, and Investment is set to hold a crucial meeting with the sugar industry next week.
In a strategic move to enhance the sugar sector’s performance and promote exports, Caretaker Minister for Commerce, Industries, and Investment is set to hold a crucial meeting with the sugar industry next week. The focus of the discussion will be on the potential import of raw sugar for refining and subsequent export purposes.
Caretaker Minister expressed his commitment to addressing key challenges faced by the industry during a meeting with the Association in November last year. He highlighted that the $3 billion forex industry operates for only four months annually, producing 6.5 million tons with less than Rs 2.5 billion sourced from local sugarcane growers. Emphasizing the need for importing raw sugar, he urged the industry to operate at full capacity to boost exports.
The Pakistan Sugar Mills Association (PSMA) acknowledged Minister’s efforts to increase exports, expressing appreciation for his stance during the meeting regarding the import of raw sugar. The PSMA anticipates that this measure could lead to over $3 billion in exports from the sugar sector, complementing the current annual earnings of over $500 million from ethanol exports.
Before the caretaker Commerce Minister’s intervention, the industry had faced obstacles in obtaining permission to import raw sugar for refining, hindering foreign exchange earnings and jeopardizing employment continuity outside the crushing season.
Highlighting the challenges faced by the sugar industry, the PSMA noted that the crushing season spans only three months, leaving the plants idle for nine months. This downtime leads to increased fixed charges, raising the overall cost of sugar production.
The industry, which heavily relies on domestic value addition of sugarcane, contributes significantly to the GDP, with farmers receiving over Rs 600 billion and contributing Rs 590 billion to the GDP. Additionally, it generates over Rs 100 billion in taxes and plays a crucial role in rural employment.
The Association emphasized that despite the constitutional guarantee of freedom of trade, arbitrary measures to control sugar prices disproportionately benefit 80% of industrial consumers at the expense of 20% domestic consumers.
Iskandar Khan, Vice Chairman PSMA Central/Chairman KPK Zone, argued for a shift in focus towards providing sales tax-free sugar to underprivileged individuals through Utility Stores instead of persistent crackdowns on the sugar industry, which he claims distort the market mechanism.
The PSMA’s concerns have been formally communicated through a letter not only to Caretaker Minister Gohar Ijaz but also to other key figures in the government. Copies of the letter have been sent to the caretaker Prime Minister, Anwar ul Haq Kakar, caretaker Finance Minister, Dr. Shamshad Akhtar, and Chairman Federal Board of Revenue (FBR), Malik Amjad Zubair Tiwana.
As the sugar industry awaits the upcoming meeting with the Caretaker Minister, stakeholders anticipate a comprehensive discussion that could pave the way for policy adjustments, ensuring sustainable growth, increased exports, and the continued prosperity of the sugar sector in Pakistan.