Sugar export subsidy

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 emphasized that they do not require any subsidy. But even after 6 months the sugar industry has failed to export the quantity allotted to them.
A year earlier a small subsidy of Rs 13 per kg was allowed, which ended up costing Pakistan 650 crore rupees. 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 subsidy 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 Rs 40 per kg but Pakistanis have to pay for domestic produced sugar Rs 57-67 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 tones 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 tones sugar from international market. Therefore no subsidy should be given to sugar industry for exports. No additional exports should be allowed until local sugar price is equal to international price. And if exports are allowed then the sugar exporting companies should be held responsible and heavily fined (Rs. 300 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 Govt low rates, before they be allowed to export sugar.
SHAHRYAR KHAN BASEER
Peshawar

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