The Sugar Supply is Surpassing Demand

The Sugar Supply is Surpassing Demand

Islamabad: The sugar supply (4.7 million tons) is surpassing demand (4.3 million tons) in 2010-11 season. The following break up may kindly be seen in this context for 2010-11 season: Domestic sugar production 41,68,723 tons, Leftover Stocks:19,575 tons, Stocks with TCP: 4,00,000 tons; Sugar imported by private sector: 1,38,000 tons; total: 47,26,298 tons. Presently sugar stocks stand at 2.012 Million Tons, which are sufficient till 25th December, 2011 on consumption pattern of 350,000 tons/month.

In 2010 calendar year the monthly off-take of sugar was particularly low. The total off -take in 2009-10 was 37,86,556 tons or in one month 3,15, 546 tons of sugar was consumed. Average sugar consumption/off take is estimated at 350,000 Tons per month or 43,00000 tons. Consumption is calculated on the basis of last 12 months average off-take. It shows that sugar demand is ‘price elastic’. If the price is high less sugar is consumed.

As regards sugar price being raised on the plea of ‘Federal Excise Duty’ the factual position is that White Sugar was allowed two concessions till March 2011. Firstly the assessed sugar price per kg was fixed at Rs. 28.88/kg. Secondly sales tax levied was 8% of this fixed assessable value. In March 2011 the assessable value was taken as the ‘market value’ while the sales tax was still levied at 8% or approx. half the sales tax levied on other items. Now, Sugar has now been exempted from sales tax through Financial Act 2011 and ONLY 8% Federal Excise duty has been imposed. Moreover 2.5% SED has also been abolished as for all other items. As such if ex-mill price is taken as Rs. 60/kg then the 8% FED will be Rs. 4.80/kg. The increase in sugar price is totally unjustified as the sugar mills have already increased the ex-mill price to the tune of Rs. 6.30/kg (Sales tax 8% and Central Excise Duty @ 2.5%) since March 2011.

Sufficient stocks of sugar are available in the country and there is no shortage of sugar. The Interior Ministry and concerned provincial departments, have already been requested to control any smuggling or hoarding in their jurisdictions. The sugar sale is continuing at Rs. 55/kg from USC outlets for lower income groups.

For more information, contact:
Haji Ahmed Malik
Principal Information Officer
Press Information Department (PID)
Tel: +9251 925 2323 and +9251 925 2324
Fax: +9251 925 2325 and +9251 925 2326

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