For business information, annual reports, laws, ordinances, regulations and articles.

	Web Paksearch.com

Policy paradoxes

The government policy governing the sugar industry has not been desirably conducive and was designed on short run basis. Its adhoc administration has been one of the principal disruptive influence casting factor. This fact can be deduced from four changes introduced in a single year of import regime governing sugar. To begin badly with it, on July 07, 2000 custom duty on sugar import was out of context cut to just 15% from 35%, consisting of 25% regulatory and 10% custom duties invoked on June 23, 2000. Ban on sugar import from India imposed earlier due to its inferior quality and to defeat dumping design, was lifted on August 29, 2000 maintaining the duty structure at 10%. This opened flood gate of flows of inferior quality sugar at dumping prices. Ban on import of sugar from India was re-clamped from March 07, 2001 extending cover of protection to letters of credit already established. Its quantity was estimated at about 50,000 tons. But the actual flow surged to 170,000 tons by August 2001, which inflicted devastating blows to sales and pickup of sugar of the national industry. Ignoring this impact, it was all the more disconcerting to find that custom duty on sugar import was reduced to 10% from June 18, 2001, on announcement of the federal budget for fiscal year 2001-02. The PSMA consistently drew attention of the authorities to syndrome of large sugar stocks pile up with the national sugar industry. At long last on September 17, 2001 custom duty on sugar import was raised to 20%. By that time much damage had already been suffered by the national sugar industry. As of September 30, 2001 (2000) national sugar industry held a huge stock load of 620,648 (27,274) tons of sugar while the next crushing campaign was near by.

Import of sugar by its timing effect was extensively damaging during the sugar year of Oct 2000-Sep 2001 and also dragged its disruptive drain over the beginning of the succeeding season, owing to huge sugar stocks at 621 thousand tons on September 30, 2001, normally being of 2.5 months consumption.

Monthwise sugar imports

Source: Federal Bureau of Statistics

Sugar availability during the year surging to 3,632 thousand tons, with unsold stock of 621 thousand tons piled up at end September 2001, both set a new undesirable record. It was nerve-wrecking for the sugar industry, specially in arranging for its financing, coinciding with rising incidence of debt servicing, increasing the average cost of sugar sales of the industry. Usually, the stress of carrying charge tends to be ignored by the authorities in zeal of expressing extra concern about sugar price, though it is a visible component.

National sugar requirement, during the year on proper evaluation, was about 2.90 million tons per annum, even by liberal estimation at per capita consumption of 22 kilogram in Pakistan, much higher than in the neighbouring countries. For the 131.50 million souls population of Pakistan, 2.9 million tons of sugar seemed sufficient. Availability surpassed the requirement by hefty 25.24%, which invariably would cast shadow on price line and eclipse earning scope aghast.

Sugar requirement

	Web Paksearch.com

Home | About Us | Contact | Information Resources