Sugar price hike strikes on the heels of flour crisis in Pakistan

Sugar rates reach Rs85 per kilo in Punjab, Rs78 in Karachi

LAHORE: With the nation already reeling under the wheat price hike, the rates of sugar have started to creep up in the country.

The impact of the increase in the ex-mill rate of sugar could be felt across Punjab on Tuesday as the sweetener became dearer by Rs9 per kilo at retail level.

The ex-mill rate of sugar had surged by Rs800 per 100 kilos to Rs7,600 over the last one week.

At retail level, sugar is being sold at Rs85 per kilo from the earlier Rs76, while the wholesale rates witnessed a slight increase of Rs1 per kilo to Rs77.

In Karachi, the sugar rates reached Rs78 per kilo at retail level.

“The production of sugarcane this year has declined by 15 per cent,” Pakistan Sugar Mills Association Sindh Chairman Tara Chand told The Express Tribune on Tuesday.

“The government has fixed the price of a 40-kilo sugarcane bag at Rs192, but farmers are selling the commodity to sugar mills at Rs240 per 40 kilos,” said Chand.

He said that production of sugar mills is only 70 per cent due to the limited sale of sugarcane by the farmers, adding that their production cost also increased due to a five per cent increase in the government’s sugarcane rates and five per cent sales tax.

However, sources in the Punjab Sugar Dealers Association accused the sugar mills of deliberately delaying the start of the crushing season, which created the price hike. The crushing season usually starts by the end of December, but this year it began on January 20 (Monday).

“Sugar mills want to purchase sugarcane from farmers at low prices, which is why they started the crushing season late,” they said. “They [the sugar mills] don’t want to pay the additional price of sugarcane to the farmers.”

Sources claimed that instead of buying sugarcane from farmers, the sugar mills want to sell sugar to them at higher rates under a barter system. If the sugar mills manage to secure the deal, it would benefit them twofold. “On the one hand, they would not have to pay the additional price of sugarcane, while on the other, they would sell sugar to the farmers and make double the profit,” the sources said.

They said that the production of sugarcane has been recorded at 5.4 million tonnes for the current year while the requirement is 5.5 million tonnes, leaving a shortage of 100,000 tonnes, which could easily be met through the carryover stock of last year, which is 400,000 tonnes.