According to a press release issued by the Ministry of Industries, there are ample sugar reserves and there will be no shortage of sugar in the country in the coming months,
Figures released by the ministry reveal that domestic sugar production in 2010-11 was recorded at 41,56,392 tonnes, while leftover stocks of sugar were 19,575 tonnes. Stocks of sugar imported by Trading Corporation of Pakistan (TCP) stood at 400,000 tonnes while sugar imported by the private sector stood at 1,38,000 tonnes that takes the total quantity of sugar to 47,13,967 tonnes.
The total average consumption in the last three years has been 3.8 million tonnes. In one month 3,15,546 tonnes of sugar was consumed. Average upper benchmark for sugar consumption is 350,000 tonnes per month with 0.1 million tonnes extra in Ramadan. It is expected that sugar demand in 2010-11 will be 4.3 million tonnes.
With regard to allegations of smuggling to India, sugar price in India, stands at Rs61 per kg. Sugar smuggling to India therefore would not be a viable option with their sugar priced Rs10 per kg below our domestic price. There is in fact an incentive to smuggle sugar to Pakistan from India, the ministry states.
Sugar price in Afghanistan is Rs104 per kg but its annual demand according to International Sugar Organization (ISO) is only 235,000 tonnes which was imported from India, China and Brazil. Their demand is 5.6 per cent of Pakistan’s present sugar production. Smuggling of sugar to the neighboring countries would not be a viable option with high fuel costs by road. However, as a precautionary measure Interior Ministry is taking preventive measures to check sugar smuggling the ministry press release stated.
Sugar has been exempted from sales tax through Finance Act 2011 while 8 per cent Federal Excise duty (FED) has been imposed. Moreover 2.5 per cent special excise duty (SED) has also been abolished. Ex-mill price of sugar is Rs64.80 per kg; wholesale rate is Rs65.80 per kg while the retail sugar rate is Rs66.80 per kg. Therefore any increase in price above this will be unwarranted, stated in the press release.
The position of stocks shows that approximately 1.6 million tonnes sugar is available at present compared to 0.63 million tonnes over corresponding period of last year. The artificial creation of sugar shortage in Ramadan by hoarders and speculators needs to be checked firmly by the administration, said the press release.
