ISLAMABAD, March 22: The Senate Standing Committee on Industries and Production has called upon officials from the Competition Commission of Pakistan (CCP) and representatives from the Pakistan Sugar Mills Association (PSMA) to investigate the factors affecting the pricing of sugar and to provide a detailed explanation regarding the recent increase in sugar prices.
This decision was made during a meeting on Friday, chaired by Senator Aon Abbas, where the committee discussed the composition of the Sugar Advisory Board (SAB) and its role in determining sugar prices nationwide.
The committee chairman expressed concerns about the continued absence of the Secretary of the Ministry of Industries and Production for the third consecutive time and instructed the secretary to attend the next meeting.
Committee members were briefed that the SAB, which serves as a recommendatory body, reviews the National Sugar Policy and oversees the production, export, and import of sugar.
Chairman Senator Aon Abbas raised questions regarding the government’s decision to allow the export of 0.7 million tons of sugar last year, despite concerns over national sugar demand.
He also noted that sugar mills raised the price of sugarcane due to increased input costs and questioned the role of the SAB in setting the price of sugar.
High Sugar Prices: Sugar Advisory Board
The additional secretary of the Ministry of Industries clarified that the SAB is responsible for ensuring the strategic stock of sugar, as mandated by the federal government, but does not have a role in fixing sugar prices.
Senator Aon Abbas further pointed out that 44% of sugar mills in the country are owned by political families, according to ministry data. As a result, the committee unanimously decided to invite CCP officials and PSMA representatives to brief the members on the issue.
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Senator Abbas also accused sugar mill owners of hiking prices at the end of the crushing season, leading to the committee’s decision to summon both the CCP and sugar mill owners to investigate the price increase.
The committee was also updated on the status of the Utility Stores Corporation (USC).
The managing director (MD) of USC informed the committee that the corporation is listed for privatisation, although the process has been delayed due to the absence of a two-year audit, which is expected to be completed by August 2025.
An initial assessment of USC’s properties has already been conducted, and it is on the government’s second privatisation list.
High Sugar Prices: USC Assets and Evaluation
The MD USC stated that the estimated value of USC’s immovable assets stands at Rs8.3 billion based on 2020-2021 estimates. However, USC’s liabilities total approximately Rs14 billion.
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Regarding employees, the USC employs a total of 11,614 individuals, with 5,000 regular employees and 5,900 on contract or daily wages.
Regular employees have been placed in the surplus pool, while no decisions have been made yet concerning the contract and daily wage employees.
The committee instructed the ministry to keep it informed about any decisions affecting these employees.
It was also clarified that once USC is privatised, contract employees will be dismissed, and 1,700 loss-making USC stores will be closed. After privatisation, only 1,500 stores will remain operational, requiring staff, with approximately 1,000 stores being franchised.
USC’s monthly expenses have been reduced from Rs1.02 billion to Rs520 million due to the closure of unprofitable stores, decreasing monthly losses by Rs220 million.
