Imports driving Punjab sugar prices down

Private sector has already imported 30,000 tonnes and TCP will bring in another 100,000 tonnes in October

LAHORE:

As the first shipments of imported sugar enter markets in Punjab and elsewhere, officials and dealers say a knockdown effect on prices is already apparent.

Private sector importers have brought in nearly 30,000 tonnes of sugar after the government greenlighted the import of the commodity. The result in Punjab at least, according to dealers, has been a reduction in sugar prices from Rs110 per kg to Rs95.

To further reduce the impact of the sugar crisis, the government, through the Trading Corporation of Pakistan (TCP), is looking to import more than 100,000 tonnes of sugar next month, officials said. “The first shipment, of around 25,000, tonnes will reach Karachi from UAE by October 12,” an official in the know told The Express Tribune. “A shipment of another 76,000 tonnes will arrive by October 21,” he added.

Both dealers and officials believe the move will shave off another Rs10 per kg from the price of the commodity. “In Punjab, we are certain the price of sugar could go as low as Rs85 per kg,” said sugar dealer Majid Malik.

According to sources, the Punjab Food Department will be making arrangements to bring imported sugar from Karachi and distribute it among the various districts of the province. “Freight charges will be paid at the rate of Rs 3,500 per metric tonne for transporting sugar from Karachi port to Lahore and Rs 3,700 per metric tonne for transporting it to Rawalpindi,” an official said.

Meanwhile, sources said the Punjab department of industries has been empowered to control sugar prices in the market by taking strict action against those selling it at an exorbitant rate. The government has also reduced sales tax on sugar to one per cent from 17 per cent, and has abolished the 5.5 per cent holding tax on imported sugar as well.

“We have right now around 400,000 tonnes of sugar in our stock,” said a Punjab Food Department official. “The import of another 100,000 tonnes in October will ensure there is no shortage till the end of November,” he said.

On the other hand, the government is also increasing pressure on sugar mills to ensure a ready supply at affordable price, officials said. An ordinance amending the Sugar Factories Control Act 1950 has already been issued to impose heavy fines on violators.

The Punjab Food Department has also developed an efficient system for collecting data on sugar stocks in sugar mills on a day-to-day basis, sources said. Assistant commissioners have been conducting regular physical inspections at mills and the department intervenes immediately if mills sell more than 10,000 tonnes.

Fearing exorbitant fines, Sugar Mills Association relatives have held talks with Punjab Food Secretary Asad Rehman Gilani. A meeting of the Cane Board has also been convened on October 5 to determine the price of sugar cane with input from farmers and mill owners.

Speaking to The Express Tribune, Gilani voiced confidence that the arrival of imported sugar would make the commodity much more affordable.

Published in The Express Tribune, September 30^th, 2020.