Punjab starts seizing sugar from mills to sell at notified rate

LAHORE: The Punjab government has started seizing stocks from mills to sell the sweetener in the market at notified rates, following manufacturers’ refusal to reduce sugar price, official sources confirmed on Monday.

“We confiscated 500 tons from Macca Sugar Mills on Monday in first ever raid on premises of manufacturers,” said a senior official of the provincial Food Department. The official said that despite clear instructions by the government, no stock of sugar was supplied by mills in the market. “Therefore, we are left with no option but to take action as per law.”

The government has started taking over the sugar stocks on the strength of the Punjab Sugar (Supply-chain) Management Order, 2021, the official explained. To a question, he said, similar actions would be extended to the entire province. “We cannot afford to leave the masses at the mercy of the sugar millers,” he said.

To another query, the official said that the seized stocks would be sold through dealers at maximum Rs85 per kg retail price, against the high rate of Rs115 per kg that was prevalent a couple of days back.

Following administrative actions taken by the provincial government, a downward trend has kick-started in the price of sugar.

On March 25, 2021, the government introduced Punjab Sugar Supply Chain Management Order 2021 and the Prevention of Speculation in Essential Commodities Ordinance 2021.

As per provisions of the order, sale and purchase of sugar would be regulated by registering warehouses of sugar mills and dealers and only registered dealers would be allowed to sell or purchase sugar.

With introduction of Punjab Sugar Supply Chain Management Order 2021, it is stated that it would help cope with sugar mafia besides ensuring the supply of sugar to the people at affordable rates.

No factory, dealers, wholesale dealer can store more than 2.5 tons sugar, and an NOC from concerned Deputy Commissioner would be required if more than fixed volume was stored.

Unregistered dealers and wholesale dealers cannot sell or purchase sugar. No sugar mill can sell its sugar to an unregistered dealer. Cane commissioner and deputy commissioner have been empowered under this order and they can take legal action in case of any irregularity. Under this order, sugar mills and wholesale dealers would be bound to show their record to the cane commissioner.

The Prevention of Speculation in Essential Commodities Ordinance 2021 aims to ensure availability of essential commodities including sugar, wheat, edible oil, rice and pulses to the people at affordable rates. It would also work on curbing hoarding of the essential commodities.

Punjab government also decided to import 200,000 tons of sugar to curb price hike in the province. The sugar industry on April 3, 2021 expressed its inability to sell sugar at notified price. Instead, Pakistan Sugar Mills Association (PSMA) asked the government to remove 17 percent general sales tax (GST) levied on sugar in order to reduce its price.

Otherwise, they offered government to take over sugar stocks of mills along with all the liabilities of each manufacturer. Earlier, in a letter written to Chief Secretary Punjab, PSMA North Zone claimed that dealers’ network had become non-functional due to the interventions and investigations by government agencies. It was the dealers who were not lifting sugar from the mills, it said.

The PSMA further claimed that the body was actively engaged with the cane commissioner as well as deputy commissioners in their respective districts to ensure adequate supply of sugar. But the Punjab Sugar (Supply Chain Management) Order 2021, which demands registration of brokers, dealers and wholesalers as a prerequisite for purchasing sugar from the sugar mills, was a serious impediment to maintain the supply line.