ISLAMABAD (January 28 2004): Pakistan Sugar Mills Association (PSMA), Punjab Zone Chairman Javed Kayani has urged upon the government to immediately take remedial measures for the disposal of surplus sugar in the country.

Kayani said that a PSMA delegation had met the federal government authorities some time back to apprise them of the present state of affairs of the sugar industry.

He said that the PSMA submission to the government was that it should make arrangements on emergency basis to lift an additional quantity of 300,000 tonnes during February and March, which in his opinion, was the only option to ease the pressure on the industry.

Javed Kayani said that since the price of sugarcane was fixed by the government to protect one of the stakeholders of the sugar sector, therefore, it was the responsibility of the government to take necessary steps for stabilisation of sugar price in the open market.

He said the mills were forced to make distress sales to manage their liquidity, which was a cause of creating glut in the market. He said, at present, the natural phenomena of supply and demand prevailed in the country, which was causing an imbalance in the sale price.

Kayani suggested that it was high time that a long-term policy about the disposal of surplus sugar should be formulated either in the form of buffer stock or export.

He said the Indian government was paying $25 per tonne as subsidy on sugar export to dispose of surplus commodity, which was termed less by the Indian Sugar Mills Association (ISMA).

He reminded that the ISMA had shown its inability to export 800,000 tonnes of sugar at the present support of $25 and demanded increase in the rate of subsidy.

Kayani said since the fundamentals of both the countries were similar, the Government of Pakistan should evolve such a system, which could equally protect the interests of all the stakeholders of the sugar sector, including growers, industry and consumers.

He said that under the South Asian Free Trade Agreement (Safta) regime the tariffs would ultimately go down to 5 percent, which would hurt the domestic sugar industry.

He said that sugar should be included in the sensitive items' list so that the local industry should be protected.

Courtesy Business Recorder