ISLAMABAD, Feb 8: The Economic Coordination Committee (ECC) of the cabinet allowed on Tuesday an unlimited import of raw and refined sugar to control rising sugar prices in the country, it is learnt.

The meeting, presided over by Prime Minister Shaukat Aziz, also directed the Trading Corporation of Pakistan (TCP) to release sugar from its 550,000 tons of stocks through the Utility Stores Corporation to ease the supply situation and the price pressure, official sources told Dawn.

In a separate letter to the four chief ministers, the prime minister directed the provincial governments to take strong and effective administrative action under anti-hoarding and profiteering laws against sugar hoarders to ensure that the available sugar flowed into the market to positively impact the consumer price.

The sources said the ECC was informed that sugar was emerging as a major challenge for the government because its prices had increased by Rs8 per kilogramme in the last few weeks without any reason.

In the letter to the chief ministers, the prime minister said the federal government had taken a decision to allow import of raw and refined sugar by the private sector to ensure increased supply in the market.

However, the impact of the decision would be neutralized if sugar continued to be hoarded by the profiteers for speculative purpose, the prime minister said while inviting provincial governments' attention to a matter of vital importance concerning rising price of sugar despite the fact that the sugar stocks with private stockists reportedly remained at high level, a brief official statement said.

The sources said the ECC expressed deep concern over the rising sugar prices and decided that all those private parties who could open letters of credit (LCs) with the State Bank over a period of two weeks would be allowed to import sugar (both raw and refined) without any limit.

The ECC, the sources said, also did away with withholding tax on import of refined sugar with immediate effect. The import of raw and refined sugar would be in addition to 250,000 tons of raw sugar import allowed by the government last month.

The meeting was informed that the TCP still had stocks of 550,000 tons of refined sugar in its warehouses but its market prices had increased owing to a lower than expected sugarcane production in the country. It was, therefore, decided to release these stocks to the market through utility stores to stabilise the prices.

The ECC also decided to provide federal government's guarantees as a special case to raise about $100 million foreign exchange component of the 969mw Neelum-Jhelum Hydropower Project in Azad Kashmir in view of its strategic importance to protect Pakistan's rights over River Jhelum.