ISLAMABAD (Reuters) - Pakistan on Tuesday allowed the import of 300,000 metric tonnes of sugar to meet a shortage in production below consumption levels, the finance ministry said, a move that could support global prices.
The Economic Coordination Committee (ECC), a top body that makes crucial financial management decisions, gave the green light to the importers.
“The ECC considered a proposal by the Ministry of Industries and Production for import of refined sugar by the Trading Corporation of Pakistan (TCP) to maintain buffer stocks, and allowed import of up to 300,000 metric tonnes of white sugar,” the ministry’s statement said.
Pakistan - which had been exporting sugar until earlier this year - has a shortage after production fell below demand in the 2019/20 marketing year that ends on Sept. 30.
The price has risen sharply in the last few months, reaching as much as 90 rupee a kg amid a scandal that sugar barons have made billions.
An investigation report made public in May by Prime Minister Imran Khan’s government found that sugar mill owners had made a windfall profit of over 100 billion rupees ($600 million) through actions such as fudging the production cost to claim subsidies, under-reporting their stocks and exploiting farmers.
The report mentioned cabinet ministers, and Khan last week ordered a crackdown on the sugar industry to bring prices down.
The sugar price was as low as 54 rupee a kg when Khan took over in late 2018. Opposition parties say Khan would look the other way to help his aides, a charge the government has denied.
The finance ministry set up a committee to finalise a mode of sugar procurement.
Writing by Asif Shahzad; Editing by Kevin Liffey and Giles Elgood