Pakistan: Dispute erupts between ministers over sugar exports
A dispute in Pakistan has arisen between the Industries and Petroleum Ministers over halting sugar exports due to rising prices. While the Petroleum Minister advocates for a suspension after retail prices exceeded benchmarks, the Industries Minister argues for continued exports. Some mills have failed to pay farmers, violating export conditions, complicating the situation as prices fluctuate.
Islamabad: A dispute has erupted between the Minister for Industries and the Minister for Petroleum over sugar exports, with the latter recommending a halt to shipments while the former continues to push for exports, despite a government decision to stop them, reported The Tribune.
The retail price of sugar has exceeded the government’s set benchmark, making it mandatory for the Industries Ministry to halt exports. However, the ministry remains in favour of continuing overseas sales. In addition, some sugar mills have failed to pay farmers using the proceeds from exports, violating another condition set by the government.
The Economic Coordination Committee (ECC) had allowed sugar exports, provided the retail price remained below a certain benchmark. It had decided that if prices rose above that level, exports would be stopped.
Sources revealed that a report from the Cabinet Committee on Monitoring of Sugar Exports indicated that retail prices had surpassed the benchmark, prompting the Petroleum Minister to call for halting exports during meetings held in late July and early August 2024. However, the Industries Minister opposed this, arguing that only mills that had failed to pay farmers should lose their export quotas.
The report highlighted that while the ex-mill price remained below Rs140 per kg, the retail price exceeded the benchmark of Rs145.15 per kg by small margins on multiple occasions in July. Additionally, some sugar mills had not used their export earnings to settle payments to farmers, a key requirement of the export policy.
The Petroleum Minister pushed for the cancellation of export quotas in the second meeting of the monitoring committee, arguing that the mills were failing to meet their obligations. The Industries Minister disagreed, suggesting that penalizing the entire sugar industry for the actions of a few mills was unfair.
A report was subsequently submitted to the Petroleum Minister, who returned it on August 15, recommending that sugar exports be halted immediately until all conditions were met.
In June 2024, the ECC approved the export of 150,000 metric tons of sugar, and the cabinet later set guidelines for monitoring the process. These guidelines stated that if the ex-mill price rose above Rs140 per kg or the retail price exceeded Rs145.15 per kg, exports should be stopped. Additionally, the committee was tasked with ensuring that export proceeds were used to pay farmers.
By late August, the retail price had dropped to Rs143.79 per kg and Rs143.09 per kg, below the benchmark, while the ex-mill price remained well below Rs140 per kg. As of August 28, it was reported at Rs132 per kg.
The State Bank of Pakistan reported that by August 23, advance payments of $62.845 million had been received for 103,853 metric tons of sugar, but only 75,056 metric tons had been shipped, leaving a balance of nearly 29,000 tons.
Exports hit a significant roadblock in mid-August due to the closure of the Torkham border following cross-border firing by Afghan forces. In response, the Ministry of Industries requested a 15-day extension from the ECC to allow exporters to complete their shipments, though it recommended that mills which had failed to pay farmers should not be granted an extension.
Source Link : https://www.chinimandi.com/pakistan-dispute-erupts-between-ministers-over-sugar-exports/
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