Sugar price shoots up to Rs160 per kilo

‘Artificial shortage’ of sweetener allegedly created by sugar mill owners, traders

KARACHI:

Sugar prices on Thursday spiked to a record high of up to Rs160 per kilo in retail markets in different parts of the country in the wake of an "artificial shortage" of the sweetener allegedly created by sugar mill owners and traders.

More importantly, the sugar mill owners are once again using delaying tactics in the production of new stocks of the sweetener from sugarcane, though they are bound by the sugar act to start cane crushing maximum by the first week of November every year, sources told The Express Tribune.

"This is the fourth day (Thursday) of November and currently, not a single sugar mill is in operation in the country," a source said.

Earlier, former Sindh chief minister Arbab Ghulam Rahim, who is now part of the ruling Pakistan Tehreek-e-Insaf (PTI), has written a letter to Sindh CM Murad Ali Shah to issue directives to the sugar mill owners to start crushing season in the province, it was learnt.

Read Govt imports ‘most expensive’ sugar ever

The sources speculated that the PTI offshoot group – under the leadership of Prime Minister Imran Khan's former close aide Jahangir Khan Tareen – was deliberately creating the situation to pressure the government to close graft cases against sugar mills, as Tareen remains the single largest producer of the commodity in the country.

The sugar was available at Rs100 per kilo in retail markets about a month ago, a retailer recalled.

"We have ended the day selling sugar at Rs140 per kilogramme in the wholesale market. We sold it yesterday at Rs130 per kg," a wholesaler at the country's largest wholesale market Jodia Bazaar, Karachi said.

The market remains the single largest source of the commodity being supplied to retailers across the country.

"The sugar mills are supplying the commodity in small quantities on a day to day basis to wholesalers at Jodia Bazaar these days. The short supplies are resulting in sky-high prices," he said.

Pakistan is facing an "artificial shortage" of sugar despite the fact that the mills have produced the commodity in surplus. Besides, the government imported sugar to maintain supplies and stabilise the price, the wholesaler recalled.

In the wholesale market of Lahore, the price of sugar has gone up to Rs135 per kg. In the retail shops, it has started selling at Rs140 per kg.

In Peshawar, a 50kg sack of sugar sold for Rs6,000 three days ago has reached Rs7,100. Thus, the wholesale price of sugar is Rs140 per kg, while the price of sugar in grocery stores has gone up from Rs145 to Rs150 per kg.

In Balochistan, the price of sugar has reached Rs150 per kg.

In April, the US Department of Agriculture (USDA) estimated Pakistan's sugar production at 6.8 million metric tons (MMT) during the current marketing year 2021-22, up 14% from the previous year’s revised estimate, due to significant increases in area and sugarcane yields. "Sugar consumption for the same (ongoing) year is forecast at 5.9 MMT, 3% higher than last year’s estimates," it said.

The Pakistan Sugar Mills Association (PSMA) had drawn Premier Imran’s attention, claiming that banks were not providing them the required loans to buy sugarcane from farmers.

Presently, the growers cultivated cane worth Rs500 billion. However, mill owners were facing liquidity crunch and banks were not providing the required credit to them. They borrow billions of rupees every year to pay growers and produce sugar, according to the PSMA.

There are unconfirmed reports in the market that a ship carrying sugar is on the way to Pakistan. It is expected to anchor at Port Qasim on Saturday. "We are selling sugar at Rs100 per kilo for December in the wholesale market," the wholesaler said.

The price is expected to go down in December as mills would throw the new stock of the commodity in huge quantities in the market by then, he said.