ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday allowed export of 225,000 tonnes of sugar, based on estimates that there would be a surplus of 1.23 million tonnes.
However, only those mills will be allowed exports which have cleared all outstanding dues of farmers from the last season, and which have started crushing at full capacity.
According to final estimates of provincial agricultural departments, the countrywide sugarcane production in 2015-16 stood at 65.5m tonnes, 3.9 per cent less than the production target fixed by the Federal Committee for Agriculture. The decline was due to a 0.7pc fall in the size of area under cultivation and a 2.9pc drop in yield.
Sugarcane provides raw material to the sugar industry, which is the second-largest agro-based industry having 88 mills across the country.
It was also decided in the ECC meeting, chaired by Finance Minister Ishaq Dar, that the Ministry of Commerce would ensure there are adequate checks and balances to maintain price stability in the domestic market.
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In case the domestic price stability is disturbed, the commerce ministry would submit a summary to the ECC to consider suspending sugar exports.
Unlike previous years, it was decided that there will be no freight or export rebate payable by the government to sugar exporters on such exports.
The ECC approved a proposal of the Ministry of Petroleum and Natural Resources regarding the allocation of an additional 50 million cubic feet per day (mmcfd) of available gas to the Guddu Thermal Power Plant from Habib Rahi Limestone reservoir. However, the approval is subject to installation of compression plant by the power plant.
Allocation of an additional 26mmcfd of available gas from the reservoir to Engro Fertilisers’ old plant was also approved for the continuation of the plant.
Moreover, the existing reduced withholding tax rate of 0.4pc on bank transactions for non-filers of income tax returns has also been extended for three months (to March 31) by the ECC on the recommendation of the Federal Board of Revenue. The extension period was due to expire on Jan 1 (Sunday).
The finance division informed the ECC that State Bank’s principal debt amounting to Rs54.46 billion outstanding against the Zarai Taraqiati Bank, as of Dec 31, 2015, was being converted into redeemable preference shares carrying a profit of 7.5pc a year. The shares are redeemable in 10 years in one bullet payment on Dec 31, 2025.
In this regard, the ECC approved the issuance of a guarantee of Rs54.460 billion by the government of Pakistan in favour of the State Bank for principal debt of the preference shares and returns thereon.