- Sources say that Govt has postponed the import of raw sugar during a meeting.
- Sugar prices have increased recently, reaching RS164 per kg in Ramadan.
- Pakistan is the seventh largest producer of sugar in the world.
Islamabad: The government has not yet enabled the importation of raw sugar to re -export in the middle of the persistent sweetener crisis on the domestic market.
The main official sources have said that the government had postponed the import of raw sugar during one of its internal meetings in recent days.
When he was contacted, Darrier ISHAQ DAR on Sunday told this journalist: “Raw sugar policy is underway and is not yet presented for approval.”
It is relevant to mention that the government has failed to reduce the prices of sweetening on the internal market when it has enabled the export of sugar provided that the internal price does not increase.
However, the price experienced an increase and, in Ramazan, went to Rs185 per kilo.
Finally, the government had to take place and conclude an agreement to fix the price of raw materials to Rs164 per kg for a month. Now, from April, there are apprehensions that prices could increase on the domestic market.
According to the draft proposal prepared by the Ministry of Industry for re -export, with an average annual production of 6.150 million tonnes, Pakistan is the seventh producer of sugar in the world. The sugar industry is part of the large manufacturing sector and has shown significant growth in the past ten years, stressing its importance for the Pakistani economy.
With 82 factories of different sizes, the sugar industry in Pakistan is quite important. However, it is based almost entirely on national cultivated sugar cane.
Sugar produced from sugar beet, which is the alternative source, has remained, on average, as low as 1.16% of annual production.
Around the world, sugar beet is used as a raw material for around 20% of sugar production. In this situation, the annual production obtained is inextricably linked to the health of the sugar cane harvest that year.
On average, sugar cane is sown more than 1.195 million hectares, mainly in Punjab and Sindh. Due to relatively higher rates of return for farmers, the sugar cane area has increased a slight increase over the past ten years.
However, the total production of sugar cane is still much lower than the installed capacity for sugar production. Sugarness is estimated to use about 60% of their hundred -day crushing capacity during a typical harvest year.
This results in an inactivity capacity of around 4 million metric tonnes per year. If it is spread over the whole year, the inactive capacity of the sector is much higher. In addition, the yield of crops and the contents of sucrose depend on various factors and vary considerably from year to year. This impact is reflected in the variation in the annual sugar production. Over the past ten years, the annual sugar production has varied by 4.818 million metric tonnes during the 2019-20 e-re-colt year to 7.870 million metric tonnes during the 2021-222 harvest year, indicating a variation of 63%.
During a happy new year of culture, Pakistan sugar production goes beyond the internal requirement, creating an export opportunity. In the past year, Pakistan has exported 7.90,000 metric tonnes of sugar. On the other hand, in years of particularly bad harvesting, Pakistan is forced to import sugar to meet its domestic demand.
Overall, in the past ten years, Pakistan could export 3.918 million tonnes of sugar, while it was forced to import 0.565 billion metric tonnes. The total profit of the export of sugar during this period was 1,607 million US dollars, which is quite thin compared to competitors with a similar industry size.
The significant inactivity capacity existing in the local sugar industry offers a good opportunity to refine raw sugar imported without needing a major capital investment. Refined sugar could be mainly used for improving export to improve Pakistan’s trade balance. At the same time, it could also be provided on the internal market during periods of shortage to ensure market stability and eliminate the need to import refined sugar at higher prices by passing necessary foreign exchange.
The geographic proximity of Pakistan to China, Afghanistan and Central Asia and, therefore, the cost of lower transport can provide a competitive advantage in these markets. It is estimated that these markets can offer an annual export potential of approximately 10 million metric tonnes. In addition to that, Bahrain, Oman and Bangladesh are also potential export destinations.
In addition, the refining of raw sugar will distribute the cost of the capital of sweets and will thus help reduce the price of sugar on the internal market.
Under the existing provisions, raw sugar can be classified by code HS 1701.1400 in the Pakistan customs rate. It currently attracts 20% customs duties, 6% additional customs duties, 18% sales tax and a 6% deduction tax.
In addition, the import of raw sugar is authorized under the order of the import police 2022. However, the exports of sugar are not authorized, except under the specific authorization of the federal government in terms of series 8 of Annex I of the Ordinance of Export Policy 2022 Read with rule 872 of SR 957 (1) 12021. refined.