Pakistan Sugar Mills Association (PSMA) Chairman Asim Ghani Usman Thursday said that sugar mills are not charity organizations but are doing business to earn profits.
He made the remarks during an online discussion at the Consultative Roundtable on the draft report “Government Regulations and Trade Potential: The Case of Sugar Market in Pakistan” held by the PRIME institute.
Usman stated that many factors have impacted the price of sugar including an increase in sales tax from 10 to 17 percent during the last few years. If the government allows the export of sugar, the industry would ensure maintaining domestic reserves and the farmers would timely get their price, he said.
He regretted that the Sugar Advisory Board is also not providing data and information to the industry timely.
Research Economist at PRIME, Tuaha Adil, highlighted in his presentation that the licensing regime for the establishment and expansion of mills should be reconsidered.
The Competition Commission of Pakistan (CCP) should be strengthened to promote competition and fair practices in the sector, he said. He suggested that the efficacy of minimum support price (MSP) needs reevaluation. The determination of MSP needs to take into account the cost borne by farmers.
The export of sugar should be open throughout the year without approval from the government. The import of raw sugar could be allowed without tariffs to provide necessary raw materials to mills to operate at maximum capacity, remarked Adil.
Former Member CCP Shaista Gillani informed that presently there is no independent mechanism to fix the support price. From a policy angle, the cost and benefit analysis of the sugar industry is necessary covering areas of administrative and enforcement costs.
During the last few years, the profits of the sugar sector are going down and this needs to be analyzed. The CCP always advocates for a free market mechanism for the sugar sector, she added.
