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LAHORE (November 16, 2010) : As many as 1,125 ton of sugar has reached Lahore from Karachi through trains and trucks while 1,200 ton of sugar has been procured from
godowns. This was disclosed by the District Co-ordinator Officer (DCO) Lahore Ahad Cheema while briefing the Chief Minister Punjab Muhammad Shahbas Sharif during a
meeting to review the situation of sugar prices and supply here on Monday.

The Chief Minister held this emergent meeting at the Lahore Airport on his return from Islamabad. Senior Advisor Sardar Zulfiqar Ali Khan Khosa, elected representatives,
Home Secretary, District Co-ordination Officer Lahore and officers concerned were present on the occasion.

While briefing the Chief Minister about sugar prices and its supply, the DCO Lahore informed that 1,125 ton of sugar has reached Lahore from Karachi through trains and trucks
while 1,200 ton sugar has been procured from godowns. He said that sugar is being sold at Rs 72 per kg at 90 percent places of the city and by today sugar will be easily
available at Rs 72 per kg in all the shops of the city.

He said that action has been taken against the elements engaged in overcharging of sugar in the provincial metropolis. The meeting was informed that sugar transported from
Karachi is also being supplied to other districts. The Chief Minister directed that provision of sugar at Rs 72 per kg should be ensured in the province at all costs and an effective
system of monitoring should be developed in this regard. He said that strict action should be taken against those indulging in overcharging.

A 

THE raging sugar crisis has imposed hardship on ordinary citizens who are forced to pay exorbitant and unrealistic prices for this essential commodity.

Instead of playing the usual blame game, it is time for stakeholders to reflect upon what contribution they can make to remedy the situation. It will be worthwhile to
reproduce here some relevant figures to highlight the problem.

Estimated sugar requirement of the country per day12,000-Sugar from the last crop available with mills as on October 31.Nil-Estimated quantity of sugar coming in
the market per day from the current crop. 500 -Average release of sugar per day by TCP since October 12.1,050 -Average availability of sugar/day.1,550 -Stocks
with TCP as on October 31.360,000

There is a gaping wedge of over 10,000 MT/day between the demand and supply of sugar. How far this gap is being filled further through the processed raw sugar
or any other sugar that may have been imported by the private sector, is for the relevant quarters to comment?

The fact remains that there is an urgent need for the sugar industry to start production without any further delay.

Meanwhile, the TCP should offload its stocks at the rate of at least 10,000 MT/day for the next 15 days in small quantities of say 100-150 MT to facilitate genuine
whole sellers to participate in the auction. This is a demand of the wholesale grocers¶ group and may help in the elimination of wealthy speculators.

My advice to growers is to bear in mind that last year when the government fixed sugarcane price at Rs102/40kg, sugar was selling at Rs60 per kg. Taking the
current average price of Rs85/kg, ± although a realistic price for calculation purpose should not be taken as more than Rs70/40 kg ± the corresponding sugarcane
price comes to Rs145/40kg.

Sugar mills which have gone into production are already paying a minimum price of Rs150/40kg for the cane that is yielding lesser sugar than during the
corresponding period last year. So where is the problem?

Like any other commodity, the price of sugarcane will also be determined by market forces. This is exactly what has been happening in the past, especially for the
last two seasons. Growers finally landed-up receiving an average price for cane that was beyond expectation. They should respond to the national call and start
harvesting cane and leave its price determination to market forces.

Today µphutti¶ is selling at over Rs4,000/md and a truck load of onion at Nasarpur at Rs800,000 per 120 bags of 100kg each. This is a consequence of only fast
changing market forces. So the growers should allow the sugar industry to perform its duty.

I would like to know that as of November 9 how many mills in the country are crushing 0.1 million maunds of cane per day? And which mills in Sanghar and Tando
Mohammad Khan districts have started crushing? And even who is the Managing Director of Matiari Sugar Mills? Not mentioning what he did or did not say.
Saleem Shaikh has attributed certain comments to me on these matters in his article that appeared in the pink pages on November 8. I wish that I personally knew
Saleem Shaikh. This would have enabled me to seek a clarification about the source of his information.

The issue is serious and its stakes at national level are very high. A solution to it that is acceptable to all stakeholders has to be found very quickly to provide relief
to the general public. This, in my view, is possible only through an informed debate between the genuine representatives of the stakeholders.

DOST MUHAMMAD BALOCH

Resident Director
Matiari Sugar Mills Ltd,


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The Supreme Court has ordered the government to bring the price of sugar back to Rs45 a kilogram. However, the two gentlemen were talking about its future
price in the range of Rs65 to Rs70 a kilogram.

The current price, according to the media, is around Rs100 a kilogram compared to the price of Rs45 a kilogram three weeks ago.

The whole episode reminds me of a 1984 Indian movie, `Aaj Ka MLA ² Ram Avtar´, starring Rajesh Khanna. Ram Avtar was a poor barber who by some stroke of
luck got elected to become an MLA.

He became powerful and also corrupt. In one scene some `naan` (bread) makers came to him and bribed him to increase the price of naan from 50 paisa to Re1.

Ram Avtar took the money from them and asked them to raise the price to Rs2.

The `naan` makers were happy. However, people got agitated and riots ensued.

Ram Avtar then went to the public and told them that these `naan` makers suck the blood of the people and that he will send them to jail if they don`t reduce the
price of `naan` immediately to half, i.e. Re1.

`Naan` makers agreed. People were very happy that their MLA had acted on their protest and everyone lived happily ever after.

The question is, if the Supreme Court is asking for a price to stay at Rs45 a kilogram, then who is the Ram Avtar in Pakistan?

In order for the Pakistani public to understand what is going on, I would strongly recommend them to watch the movie.

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³President Zardari and Prime Minister Gilani are directly responsible for the sugar crisis because they
allowed the ruling elite to empty the people`s pockets of Rs40 billion by increasing sugar prices,´ said
PML-N leader Siddiqul Farooq at a press conference.

³If the president and the prime minister have committed no national crime then they would have no
hesitation to make public the reasons behind the crisis and invoke the jurisdiction of Supreme Court in
fixing responsibility on the forces creating the crisis.´

He said the government was not accepting its negligence to cover up corruption and trying to shift the
responsibility to the opposition.

Mr Farooq also criticised the statement of Law Minister Babar Awan that sugar prices began to rise after
Punjab chief minister met the prime minister at the head of a delegation of the provincial sugar industry.

He termed it propaganda against the PML-N and said Mr Awan should know that the delegation had
offered to generate electricity and sell it to the government at 11 cents per unit.
He said the prime minister rejected the offer under the pretext that it was an expensive offer. ³It is an irony
that later the government inked an agreement with a rental power company at 20 cents per unit,´ he said.

In reply to a question, he said party chief Nawaz Sharif and his brother Abbas Sharif jointly owned
Chaudhry Sugar Mills and Shahbaz Sharif owned Ramzan Sugar Mills. ³The family has no other sugar
mills but an internet search engine claims President Zardari has five unnamed sugar mills,´ he said.

Mr Farooq said the government did not hold the minimum of 700,000 tons of sugar in the stock in
accordance with the policy of keeping strategic reserves sufficient for two months as agreed with the
Trading Corporation of Pakistan (TCP).

He said the government also failed to procure sugar from the open market between March and June
when the commodity was available at Rs56-57 per kg.

³Why the ruling party failed to launch action against those who concluded hedging agreements with the
TCP for the sale of sugar and then backed out?´ He said the government should answer under what
pressure it failed to import sugar.

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It also decided that up to 15,000 metric tones imported sugar, which is being brought from Karachi to Punjab by rail and road under special arrangements, will be
distributed across the province from Nov 12 (today) in an attempt to bring down its prices, which crossed Rs100 per kg, before Eidul Azha.

All sugar mills were also directed to start crushing before Eid with a warning of strict action against violators.

MPA Dr Saeed Elahi, who acted as provincial government`s spokesman, told a news conference here that the federal government`s negligence and delay in
importing sugar between April-June 2010, when the prices in the international market came down to the lowest level of $400 per tone, caused the biggest ever
crisis.

He said the provincial food minister as well as secretary, who were in Karachi to supervise the clearance and transportation of sugar, also convinced the TCP to
provide sugar at Rs65 per kg instead of Rs71.

Dr Elahi advised the federal government to take timely steps to import 1 million metric tones of sugar to cater to domestic requirements for the remaining days of
the current year and 2011 in the wake of cane production and capacity of sugar mills.

He said the government had made all necessary arrangements for the timely supply of imported sugar of provincial quota from today (Friday) and in this regard a
train consisting of 60 bogies would daily leave Karachi for Punjab up to Nov 25.

He said that NLC trucks would also start bringing sugar from Karachi ports from Nov 12 (today). He said the delivery of sugar would continue during Eid holidays
and all DCOs and cane commissioners would monitor the arrival of sugar up to the retailers` shops besides ensuring its prices.

He said that meetings had been held with all stakeholders by the district machinery to ensure provision of sugar at control rate and fix a margin of Rs1-3 for
wholesalers.

He said the food secretary and Lahore commissioner had ensured the continuity of supply chain in cooperation with the dealers association, adding the sugar
would be available from Rahim Yar Khan to Attock in form of centres.

He alleged that the federal government later imported sugar in less quantity which the TCP did not send in the market.

He claimed the sugar price came down from Rs110 per kg only after Chief Minister Shahbaz Sharif took up the matter in the meeting of the Council of Common
Interest and the government announced to provide 300,000 metric tones sugar to the provinces.

He said the provincial government on June 16 requested the federal trade ministry and cabinet division to import 1.2m metric tone sugar to check increasing sugar
prices, but to no avail.
Earlier, he said the chief minister had written four letters to the prime minister from September 2009 to January 2010 about the timely import of sugar and 1 million
metric tones requirement of the Punjab province alone.

Dr Elahi said his government also requested the federal government in April 2010 to avoid imposing import duty on sugar to maintain its prices in the market.

Furthermore, the auction of sugar in two installments of 10,000 metric tones by the federal government also promoted speculation and discouraged private
importers.

Dispelling impression given by some members of the federal cabinet that the Punjab government had failed to control sugar prices, Dr Elahi said the provincial
government could be blamed subject to the availability of sugar in the market. How could the provincial government be held responsible for not regulating the
prices if the sugar was neither available in the market not it could be imported, he asked.

The MPA told a questioner that the TCP informed the provincial government about its quota of 50,000 tones sugar a week ago and the government itself took
emergency transportation measures.

Responding to another question, he said a cell headed by the chief secretary had been directed by the chief minister to take indiscriminate action against
hoarders. He guessed that less than 4,000 metric tones of sugar had been hoarded in Punjab and said that sugar was either stored in Karachi by the TCP or it was
stolen from Islamabad.

Meanwhile, Lahore Division Commissioner Khushro Pervaiz Khan has said that sugar would be available in Punjab capital for Rs72 per kilo in next 72 hours or so.

Arrangement have been finalised for the transportation of sugar from Karachi to Lahore, the commissioner informed the participants of a meeting presided over by
Chief Minister`s adviser Khwaja Ahmad Hasaan on Thursday.

Fair price shops have been established all over the metropolis where sugar was available for Rs62 per kilo at present and there was no scarcity of the commodity,
he added.

A 


 
     

 

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According to the latest open market prices, the commodity is being sold at a mind boggling rate of Rs120 per kg. Judging by the trend, it would soon hit Rs150 if
the government remains ineffective in taking remedial measures.

Mediapersons who regularly visit Parliament and report on its proceedings know that the issue was there when the present government took over the charge in
March 2008, and had been creating audible echoes both in the National Assembly and the Senate since then. Almost during every session of the lower house of
Parliament, forewarnings were made by some concerned members of the house about an impending shortage of sugar in the country.

Moreover, hardly any Question Hour session of both houses passed in which lawmakers didn`t ask questions about the cost, production and availability of sugar in
the country. It was repeatedly on the agendas of parliamentary committees of commerce, industries and agriculture which jointly share responsibility of ensuring
adequate supply of sugar in the country.

But for reasons unknown, the government`s departments concerned could not formulate an effective strategy. As a result, the already inflation-ridden and poverty-
stricken poor people of the country are being made to pay through their nose for this basic commodity.

During the previous government of Prime Minister Shaukat Aziz, a more or less similar blame-game was witnessed between the mill owners and the government,
with the latter also faltering in handling the crisis.

The responsibility of ensuring sufficient availability of sugar lies largely on the Makhdoom Amin Fahim-led federal ministry of commerce under which falls the
Trading Corporation of Pakistan (TCP) which looks after the import of such commodities. To some extent, the federal ministry of agriculture and industries also
share the blame for the sugar crisis since they are involved in production projection at the national level and in the decision for import to fill the gap in case of
shortage.

Even if one believes in the government`s contention that suitable sugar stocks are available in the country and an artificial shortage has been created by hoarders
and profiteers to bring bad name to the government, it is the sitting government`s responsibility to take action against them.

According to a non-governmental organization, which works for consumers` protection in the country, it is the sugar barons` clout within the government that is
causing a fake shortage of the commodity. The NGO has rightly called for an investigation to fix responsibility for a `criminal` delay in sugar import which, it said,
had given a chance to mill owners to sell the commodity at high prices.

According to a sitting member of the National Assembly, who requested not to be named, both the Pakistan People`s Party-led government and opposition
Pakistan Muslim League-Nawaz are responsible for the sugar crisis in the country. ³Go and read through the proceedings of any one session of the current
National Assembly available in the library during which sugar crisis was discussed. Yes, some back benchers or the lesser beings of the house did talk about the
issue, but you will not find any influential member or who have some direct or indirect interest in the business taking up the issue,´ the lawmaker said.

The powerful lobby has presence across the aisles both in the Senate and the National Assembly, making it almost impossible for the sitting government to take
action against those who are directly involved in hoarding back sugar from market and virtually making millions of rupees overnight from the sudden increase in the
commodity`s price. The lawmaker asked: If the government`s claim about artificial shortage was true, who has stopped them from taking necessary action?
One can see the opposition benches involved in point-scoring game in the house repeatedly. The other day, opposition leader Chaudhary Nisar Ali Khan literally
took the house by storm on the issue of the stopping of a federal minister on Constitution Avenue by army personnel when a four-star general was reportedly
passing by. He so passionately presented his argument for supremacy of parliament and dignity of the sitting minister that it became front-page news on almost all
newspapers the next day.

On the other hand, on issues such as the sugar crisis, one might hear customary speeches criticising the government from the opposition benches, but hardly any
meaningful criticism, let alone some possible solutions that opposition parties normally offer in established democracies.

Parliament needs to know the truth behind the current crisis. If the information minister says that powerful hoarders are behind the problem, then their names
should be made part of the house`s proceedings. And the explanation of why the government has failed to break the so-called cartelisation in the sector should
also be on record.

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³The FED on the telecommunication services is 19.5 per cent and that on the sale and purchase of shares in stock markets 16 per cent. The levy on both will come
down to 15 per cent,´ said Khurrum Shezad, head of research at Investcap.

The tax on services provided by shipping agents and port and terminal operators will also drop from 16 per cent to 15 per cent.

The government will abolish FED on all services after the approval of the proposed provincial GST bills by the assemblies.

The provinces will impose GST on the services under the new laws.

A tax official said that the excise duty on all services specified in the Federal Excise Act, 2005, would remain till the provincial assemblies approved the RGST bills,
after which it would be replaced by a 15 per cent levy across the board.

Sindh intends to collect the tax itself, while three other provinces have authorised the FBR to collect the RGST on services on their behalf.

However, the centre and Sindh had decided that the RGST on shares transactions and the financial sector would be collected by the FBR for one year and
transferred to the province afterwards, a tax expert said.

A