ECC raises price of sugar by Rs7 per kg

The ECC, presided over by Finance Minister Shaukat Tarin, also approved re-lending of foreign loans to provinces on original terms, a mechanism for support and intervention prices of crops and allowed Passco to export rice. - File photo

ISLAMABAD: The government approved on Tuesday duty- and tax-free import of 1.25 million tons of refined sugar to overcome shortage, but increased its price for Utility Stores by 18.5 per cent, or Rs7 per kg.
The decisions were taken at a meeting of the Economic Coordination Committee of the cabinet, presided over by Finance Minister Shaukat Tarin.
The ECC also approved re-lending of foreign loans to the provinces on original terms, Rs10 billion bailout package for loss-making Pakistan Steel Mills, a mechanism for support and intervention prices for crops and a standardised security package for development of hydropower projects.
The meeting also allowed export of goods manufactured at the Risalpur export processing zone to Afghanistan through land route in order to revive the REPZ and fix a minimum export price for rice.
Mr Tarin told Dawn after the meeting that 500,000 tons of the 1.25 million tons of refined sugar would be imported by the Trading Corporation of Pakistan before April while the remaining 750,000 tons by the private sector before June.
The import, he added, would be exempted from sales tax and other duties to ensure that landing cost of imported sugar ranged between Rs50 and Rs51 per kg and retail price between Rs54 and Rs55. The finance minister said the ECC had increased the USC price of sugar to Rs45 per kg from the existing Rs38. It is being sold at Rs65 per kg in the open market.
He said about 1.2 million tons of sugar would be sold through the USC. The Pakistan Sugar Mills Association will supply 900,000 tons to the USC under a commitment it had made with the Supreme Court to provide at least 30 per cent of its produce at a price lower than the market.
Mr Tarin expressed the hope that sugar would be available to consumers at Rs54-55 per kg in the open market.
BAILOUT PACKAGE: The ECC approved a Rs10 billion bailout package for Pakistan Steel Mills to overcome its “acute financial crunch”. The package includes a term loan facility of Rs8 billion to be arranged by the National Bank for five years on sovereign guarantee of the federal government. Another running finance facility of Rs2 billion, renewable on a yearly basis, would also be provided by banks led by NBP on government guarantee.
LOAN RE-LENDING: The meeting approved revision of the re-lending policy for foreign loans. Under the policy the provinces will get foreign loans on same terms and conditions on which these were obtained by the federal government.
The provinces would be allowed to issue their own bonds to repay these loans to the centre. The federal government used to get foreign loans at two to five per cent interest rate, but re-lend the provinces at a mark-up rate as high as 18 per cent.
CROP POLICY: The ECC approved a strategy for food security under which timely announcement of support price for wheat and intervention or indicative price for other crops would be ensured. The strategy will also ensure timely availability of farm inputs at affordable prices with special emphasis on water conservation and its judicious use.
The policy will set area and production targets of major and minor crops in consultation with stakeholders and to enhance farmers’ access to modern crop varieties and new technologies.
Besides, the government will promote adoption of good agricultural practices to boost production, improve marketing systems and maintain buffer stocks for essential food commodities.
RICE EXPORT: The ECC allowed Passco to export, through qualified agents and brokers, its stock of super basmati to the Middle East, Iran, Europe or any other market on a government-to-government basis at a minimum base price of $900 per ton within five per cent limit of broken rice.
POWER PROJECTS: The meeting approved standardised security agreements for hydropower projects under the Policy for Power Generation 2002. The Private Power and Infrastructure Board has been authorised to approve any project-specific amendment to the agreements required during negotiations provided obligations or liabilities of the government are not increased.