Monday, April 15, 2024

Government announce ex-mill sugar price at Rs72.22 per kg

The Federal Board of Revenue (FBR) published the ex-mill sugar price for the levy of sales tax on Monday in order to limit the growing prices of the sweetener.

SRO1027 of 2021 was issued as a sales tax notification to set the ex-mill sugar price at Rs72.22 per kg. Prior to the introduction of the 2021-22 budget, millers claimed the cost of sugar to be Rs68 per kg in their reports.

The administration also shifted the mechanism of the sales tax levy to the retail level in the previous budget. Sugar is offered on the open market at Rs104 per kilogram.

Previously, the Pakistan Sugar Mills Association (PSMA) denied the sale of sugar at the government-determined ex-mill price of Rs70 per kilogram. The PSMA, on the other hand, has yet to give an official reaction to the new ex-mill sugar price.

In a separate meeting to review the trend in essential commodity prices, Special Assistant on Food Security Jamshed Cheema briefed Finance Minister Shaukat Tarin on the need to build strategic reserves of essential food commodities such as wheat, sugar, pulses, edible oil/ghee, tomato, garlic, onion and chicken to avoid accumulation and misuse.

The fundamental reason is to stabilize the pricing of everyday products. The government would create strategic reserves by importing 10-20% of total staple food consumption and supplying the market when needed to bridge the supply and demand mismatch. This effectively controls price volatility.

Mr. Tarin instructed the relevant ministries to expedite wheat and sugar imports and ensure adequate inventories are available for seamless delivery during the current fiscal year. He also instructed the ministries and the Pakistan Trading Corporation to undertake due diligence and implement adequate risk-hedging measures before floating tenders in international markets.

The finance minister encouraged provincial government officials to take remedial actions to reduce the price gap between agricultural and retail prices. He emphasized the importance of reviewing the whole food value chain and ensuring that farmers receive a proportionate share of the market value of their goods.

To fulfill high demand owing to seasonal changes, Mr. Cheema added that farmers must follow international best practices and look into other options for perishable commodities such as tomato puree, onion powder, garlic powder, and so on. This would also provide consumers with cost-effective items.

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