Sugar profiteering

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The government's decision to fix the retail price of sugar at Rs164 per kilogram, 13% higher than its earlier cap, is yet another chapter in the longstanding cycle of hoarding and price manipulation. This cycle plays out the same way every time: sugar exports are allowed under the promise that local prices will remain stable, supply is deliberately restricted, and prices inevitably rise. Instead of cracking down on profiteering, the government negotiates with the very industry responsible for the crisis, ultimately legitimising their tactics.

This is exactly what has happened. When the government permitted the export of 600,000 metric tonnes of sugar last year, it set an ex-factory price of Rs140 per kg and a retail price of Rs145 per kg. Now, after an expected market squeeze, the new ex-factory price has been set at Rs159 per kg, effectively handing a Rs19 per kg windfall to sugar millers.

Sugar millers, repeatedly accused of cartelisation, have once again managed to push prices upward while the government has rubber-stamped the increase. This cycle repeats itself year after year. Each time, the government assures the public that prices will remain under control. Each time, the opposite happens. The state actively facilitates these price hikes under the guise of official pricing mechanisms, ensuring that consumers are left at the mercy of a handful of powerful millers.

The only way to break this cycle is through strict enforcement of anti-hoarding laws. The government must actively monitor sugar stocks and impose severe penalties on millers and traders found guilty of hoarding. Surprise inspections and real-time tracking of sugar production and distribution must become standard practice.

Independent regulatory oversight is equally essential. The Competition Commission of Pakistan must be empowered to take action against hoarders for cartelisation. No single industry should have the power to dictate national pricing policies.