Decrease in sugar price: Beverage, confectionery sectors urged to pass on benefit to consumers

ZAHID BAIG

LAHORE: Agri Forum Pakistan Chairman Muhammad Ibrahim Mughal has urged the government to press the beverage and confectionery manufacturing sector to pass on the benefit of decrease in sugar prices to the consumers by reducing their prices by 25 percent.

This sector annually use 2.6 million tons of sugar and decrease in sugar prices will give them a monetary benefit of Rs 30 billion this year, Mughal claimed while talking to Business Recorder.

Commenting on downward trend in sugar prices, the Agri Forum Chairman said though it would definitely hit the growers but the government should show good governance by ensuring that the benefit is passed on to the consumers.

He said total consumption of sugar in Pakistan is 4.2 million tons out of which 1.6 million tons is used by households and 2.6 million tons by beverages, confectioners and other such manufacturers. He said on average consumers bought sugar at Rs 70 per kilogram last year thus domestic consumers paid Rs 112 billion and industrial sector paid Rs 160 billion. However, he is of the view that next year both the sectors would buy sugar at an average rate of Rs 55 per kilogram thus domestic sector would pay Rs 88 billion, while the industrial sector would pay Rs 130 billion.

He also said the government should ask this sector whether it was ready to pass on the decrease in the sugar prices to the consumers or not. He said the government should urge the soft drink and other food sector industries to declare their cost of production as was being done by the flour-milling sector and after adding up a suitable profit should give a price for the consumers. In his opinion, this sector should decrease its prices by 25 percent.

Talking about the sugarcane production, the Agri Forum Chairman said last year agricultural sector produced 60 million tons of sugarcane out of which 52 million tons was crushed by the mills. On average price of Rs 200 per maund, growers provided sugarcane worth Rs 250 billion to the mills and mills produced 4.2 million tons of sugar. This year, he hoped sugarcane production would remain around 6.5 million tons. He said growers were suffering for producing more sugarcane, as they were getting average Rs 150 per maund for their produce. He claimed that farmers would suffer a loss of Rs 30 billion this year, which would increase poverty in the rural areas.

He said cost of production had also increased this year but the farmer was compelled to harvest its sugarcane crop in order to vacate the fields for next crop.

To a question, Mughal favoured the demand of the sugar mills to allow them sugar export. "Our sugar was of very good quality and could also be exported through land routes to Afghanistan and Russian states," he added.