Karachi, November 13, 2014 (PPI-OT): ECC approves 20% RD and Export
ECC allows export of 500,000 tons
The Economic Coordination Committee (ECC) has approved the export of 500,000 tons of sugar and allowed sugar exports to Afghanistan. International prices of sugar are currently hovering around USD 434/ton and prices remain unfeasible for export via sea. One must remember that the previous quota for sugar export of 250,000 tons could not be exported and only 148,932 tons of sugar were exported. Sugar export to Afghanistan remains more feasible and firms will be able to off load excess sugar in Afghanistan.
20% Regulatory Duty approved
The ECC has also approved a regulatory duty of 20% on sugar imports to protect local industry from cheaper imports. International prices have currently declined to USD 434/ton and are currently lower than the cost of production of most sugar mills in Pakistan.
Sugar prices that recently declined in Sindh to as low as PKR 50.25/kg on month end speculative trading, have since then bounced back to PKR 52.50/kg. Fortune Securities Limited expects a higher sugar prices in the next season due to an increase in support price and a 20% duty on imports.
Sugar supply next year is expected at 4.8mn tons while demand is expected to clock in at 4.7mn tons. An oversupply of 0.1mn tons will be the lowest supply overhang in 5 years and Fortune Securities Limited expects the demand supply situation to provide some respite to sugar manufacturers that have faced lower margins for several years in a row.