
The government and sugar industry have reached an agreement, setting the ex-mill price of sugar at Rs165 per kilogramme, announced the Ministry of National Food Security and Research on Monday.
"All provincial governments will ensure the availability of cheap sugar to the public in light of this decision," said a brief statement issued by the ministry.
Last week, the PML-N led federal government approved the import of half a million tonnes of sugar in a bid to maintain affordable prices of the commodity.
"The committee approved the import of up to 500,000 metric tons of sugar to ensure a stable supply and maintain affordable prices nationwide," said a statement posted on X.
In March, Deputy Prime Minister Ishaq Dar noted that retail sugar prices should not exceed Rs164 after the Competition Commission of Pakistan (CCP) warned sugar mills against price manipulation.
Dar said that according to news reports, there was a spike in sugar prices to Rs178-179, which, he said, was "obviously not tolerable" to the prime minister.
In Lahore, sugar is currently being sold at arbitrary prices, ranging between Rs190 to Rs210 per kg. Citizens complain that sugar is not available anywhere in the city at the official rate-- Rs180 per kg.
Since last Friday, sugar mills in Sindh and Punjab have halted sugar supply to the markets, said Wholesale Grocers Association Chairman Rauf Ibrahim.
He said with supply suspended for the past four days, only stored sugar is currently being sold in Karachi, causing wholesale prices to rise from Rs178180 to Rs182 per kg and retail prices from Rs190195 to Rs200 per kg.
Ibrahim criticized the government's lack of interest in cracking down on sugar mill owners and hoarders, warning that this negligence is fueling price hikes.
According to sources, a collusion among sugar mill owners is the root cause behind the rising prices. This powerful cartel has historically pressured the government to permit exports under the guise of surplus stock, driving up domestic prices.
Between 2015 and 2020, 2.355 million metric tons of sugar were reportedly exported to Afghanistan. However, Afghan government data confirms only 1.5 million tons were received. 778,000 metric tons were smuggled, with no records found for this volume.
In past years, 26 mills benefitted from billions in subsidies for exporting 400,000 metric tons of sugar. Documents show sugar mills extracted Rs4.12 billion in subsidies up to 2021.
In March, the price was set at Rs140 per kg. After exporting 750,000 tons, it rose to Rs170 per kg. The government then raised the ex-mill price by Rs20, but sugar crossed Rs200/kg in markets. In response, the government decided to import 500,000 tons of sugar.
However, post-2021 IMF conditions banned subsidies on sugar exports. The government is now unable to subsidize the industry or fix minimum sugarcane prices, as the IMF demands complete deregulation of the sugar sector.
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