Pakistan has received the first two vessels of sugar out of the three booked for bringing 100,000 tons of the sweetener by mid-August to build the strategic reserves to counter price hike, check hoarding and profiteering.
“Third vessel, MV Ilovo River, carrying 35,000 tons of sugar, is expected to arrive on August 14, 2021,” the Trading Corporation of Pakistan (TCP) reported on Friday.
On average, the price of the sweetener stood at around Rs105 per kg in retail markets across the country over the past two weeks compared to around Rs93 per kg one year ago, according to the Pakistan Bureau of Statistics (PBS).
The price of the commodity has remained higher despite enhanced production of the commodity by the sugar mills.
“Pakistan’s MY (marketing year) 2021-22 sugar production is forecast at 6.8 million tons, up 14% from the current year’s revised estimate due to a significant increase in the area and sugarcane yields,” the United States Department of Agriculture said in April 2021.
“Sugar consumption in the same year is forecast at 5.9 million tons, 3% higher than last year’s estimate,” it added.
The sweetener was available at around Rs55 per kg in retail markets when the Pakistan Tehreek-e-Insaf (PTI) formed government in August 2018.
The government blamed the sugar mill owners for manipulating the stocks and causing price hike. The millers countered that the cost of production and transportation of stocks to warehouses had spiked.
Sugar politics has cost the ruling party its top leader Jehangir Tareen whose mills produce most of the sugar (about 20% of the total of over 5 million tons a year).
“In pursuance of federal government instructions, the Trading Corporation of Pakistan is importing 100,000 tons of sugar for the Utility Stores Corporation,” said TCP Market Assessment and Trade Division General Manager Qadeer Ahmed Bhutto.
“In this connection, the first vessel, MV Unity, carrying 33,170 tons, arrived at the Karachi Port on July 26, 2021 and completed the discharge on Friday.”
The second vessel, MV San Sebastian, carrying 30,700 tons of sugar, arrived on August 4, 2021 at the Karachi Port. The third vessel, MV Ilovo River, carrying 35,000 tons, is expected to reach the port on August 14, 2021, he added.
Earlier, the government approved the import of 500,000 tons in the current fiscal year at a cost of around Rs45 billion ($275 million). Later, the Economic Coordination Committee (ECC) of the cabinet endorsed the import of 200,000 tons to build strategic reserves.
The country produced 22% higher sugarcane at 81 million tons in fiscal year 2020-21 compared to 66.38 million tons in the previous season (FY20).
This became possible because farmers planted the crop at 12% larger area, estimated at 1.16 million hectares, in FY21 compared to 1.04 million hectares in FY20, according to the central bank data.
“Lower stocks and higher prices, in turn, necessitated the import of the commodity to meet excess demand,” the SBP said in a report in June 2021. “It is the first time in almost 10 years that the country imported any noticeable quantity of sugar.”
Compared to average imports of $6.1 million from FY11 to FY20, sugar imports in the first half (Jul-Dec 2020) of FY21 were valued at $126.6 million, it added.
Published in The Express Tribune, August 7th, 2021.
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