New sugar crisis
Recent news of falling sugar reserves and rising prices have been followed by new reports suggesting the sugar mafia was directly making policies relating to the commodity during the PDM government’s tenure, with some going as far as accusing the sugar barons and the PDM of fudging the numbers earlier this year to justify permission for exports. The interim government has said Pakistan barely has enough sugar to meet domestic consumption needs for the rest of the season.
In January, the PDM government allowed the export of some 250,000 tonnes of sugar based on projections that showed the country would still have a surplus of 1.3 million tonnes. Then-Finance Minister Ishaq Dar proudly touted his government’s successes in turning around the sugar sector and blamed the PTI for making a mess of it in the first place. But while the PTI did mismanage sugar — and many other policy areas — to allegedly benefit certain party leaders, previous PML-N and PPP governments also featured sugar crises and did nothing to address the roots of the problem, because every major party includes several people with close ties to the industry.
Pakistan exported over $100 million worth of sugar in the previous fiscal year, but despite domestic prices having doubled to Rs165 per kg since starting the year at Rs85, no action has been taken against sugar mill owners who reportedly signed an undertaking to keep prices below Rs90. Allowing exports was such a disaster that by April, the government broke its own price limit by fixing the price at Rs98.25, but even this restriction was suspended by the Lahore High Court.
It is also worth noting that large amounts of sugar for domestic consumption are smuggled to Afghanistan, also without any consequence for the smugglers. The impact of this is that shortages of varying intensity are commonplace in K-P and Balochistan, even in better times. The caretakers probably can’t do it, but even in a post-election scenario, until the sugar barons and others like them reign, such crises will keep occurring.
Published in The Express Tribune, September 1st, 2023.
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