HERE we go again. The sugar industry is once again using its tricks to cheat Pakistan. The Pakistan Sugar Manufacturing Association (PSMA) has recently requested the government to give them subsidy and allow them to export sugar.
It should be noted that the PSMA had earlier asked to be allowed to export sugar and emphasised that it did not require any subsidy. But after six months the sugar industry has failed to export the quantity allotted to them.
A year earlier a small subsidy of Rs13 per kg was allowed, which ended up costing Pakistan Rs 6500m. The whole point of allowing ‘one-time’ subsidy is to save an industry from a sudden change in business conditions, like the decrease in international sugar prices. But it does not make sense to allow subsidiaries every year to one industry and the industry still fails to improve efficiency so to compete with international prices.
In the international market sugar is priced at Rs40 a kg but Pakistanis have to pay for home-produced sugar Rs57-67 per kg. Then what is the benefit of that industry to the nation?
Three years ago the PSMA had convinced the government to give them subsidies to export 500,000 tonnes of sugar, but then later in the year there was a sugar shortage in the country, and the government had to pay another subsidy to import 500,000 tonnes of sugar from international markets.
Therefore no subsidy should be given to the sugar industry for exports. No additional exports should be allowed until local sugar price is equal to the international price. And if exports are allowed, then the sugar-exporting companies should be held responsible and heavily fined (Rs300 per kg exported), if the price of sugar in Pakistani market increases, even by one paisa.
The exporting industries should supply equal quantity of sugar to utility stores, at low government rates before they are allowed to export sugar.
Source: www.dawn.com