Sweetener traders suspend business amid crackdown in Punjab

Government confiscated 320,000kgs of sugar on Sunday

LAHORE: Following raids and confiscation of sugar stocks by the local administration, trading activity remained suspended in the province’s largest wholesale market, Akbari Mandi, on Wednesday.

On the directives of the Punjab Chief Minister Sardar Usman Buzdar, the district administration launched a massive crackdown on hoarders and stockists and seized over 400,000 kilogrammes of sugar stocks in a couple of days.

In various raids, the provincial administration confiscated around 320,000 kilogrammes of sugar on Sunday, 69,000 kilogrammes on Monday and 27,500 kilogrammes on Tuesday. The local administration also arrested three major sugar dealers on hoarding and profiteering charges.

To avoid further action, most sugar dealers and wholesalers kept their businesses closed as a meeting of sugar dealers and millers with a senior official of Punjab government is scheduled on Thursday (today).

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Speaking to The Express Tribune, sugar dealers indicated that the meeting will decide the price of the sweetener and mechanism for regulation as recent raids of local administration and arrest of sugar dealers are unjustified.

A sugar wholesaler on condition of anonymity said, “We do bulk trade in the biggest wholesale market of the province for which we hold hundreds of bags in stock. The local administration has also confiscated stocks of major retailers who sell dozens of bags daily. When there is a panic in the market every businessman or trader tries to keep sufficient stocks instead of returning its customers empty-handed. This is purely a business decision which should be dealt rationally.”

Though no trading was recorded on Wednesday, the sweetener was last traded for Rs7,960 per 100-kilogramme bag on Tuesday. Dealers indicated that new sugar price would be announced following a meeting with the government on Thursday (today). However, the commodity was sold between Rs80 and Rs85 a kilogramme in retail markets while the government has notified sweetener price at Rs70 a kilogramme.

Following the local administration’s crackdown, several shopkeepers have removed stocks from their shops to avoid government raids. Shopkeepers claim that they procured stocks at higher rates but local administration was forcing them to sell at a lower price which is not acceptable. Ample stocks of sweetener were available at Utility Stores at Rs68 a kilogramme.

Official stock statistics show that around 2.4 million tonnes of sugar stocks are available in the province.

An official of the provincial food department highlighted that the retail price of the sweetener should not increase over Rs70 a kilogramme after including all production costs and transport expenses.

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The millers have to review their cost and price as the sweetener has already become dearer.

The Pakistan Sugar Mills Association (PSMA) office-bearers warned that the province has sufficient sugar stocks available but if the situation gets worse the government will be responsible. Currently, there is no sugar shortage in markets but the local administrations are harassing dealers which would result in market distortions for which the industry cannot be blamed.

Meanwhile, Punjab Minister for Industries Mian Aslam Iqbal highlighted that the federal government has announced a big relief package of Rs10 billion to rationalise commodity prices. The government will open around 2,000 retail booths which will not only provide relief to masses but also create new jobs.