ISLAMABAD: Sugar price has registered an unprecedented increase in the wholesale and retail markets as the commodity price in wholesale reached Rs5,250 per 50-kg bag from Rs4,850 per 50-kg bag four days ago, Business Recorder has learnt.
According to wholesale sugar traders, the commodity prices since past five months are daily witnessing new and new heights, and on Thursday it has beaten all the previous records as it jumped to Rs5,250 per 50kg bag in wholesale.
Traders said that in retail now it was being sold at Rs120 to Rs125 per kg.
Traders said that the largest consumers of sugar including hotels, wedding halls, schools, and universities remained closed for almost five months but the commodity prices continually kept on increasing since March, especially after the prime minister’s sugar commission.
When contacted, a senior official of the all Pakistan Sugar Mills Association (PSMA) said that Khyber-Pakhtunkhwa sugar mills have a capacity to produce 1.5 million tons of sugar but this season the KP mills produced far below the capacity as the material used to produce sugar was used in making gur, which has great demand in Afghanistan.
He said that moreover the government has created panic in the market as raids were being conducted at every storage facility even having 100 sugar bags.
Moreover, Competition Commission of Pakistan has also created serious problems for the industry and the people associated with the sugar industry, he maintained.
He said since June 2019 the PSMA kept on providing the sugar forecast to the government but the government did not timely implement recommendations.
He added that the government had started importing sugar at a time, when local sugar industry had started crushing sugarcane, which at this point would not help the country.
On a question, the PSMA official said that every member of the PSMA had established mill by spending multi-million rupees to do business and earn profit.
He said that the association was facing serious challenges, as the government and other authorities were blaming the PSMA for their incompetence.
However, the Federal Minister of Industries and Production, Hammad Azhar, has blamed the PSMA for the country’s sugar crisis, reasoning that the commodity becoming suddenly expensive was a direct result of incorrect data provided by the association.
The minister said that the federal government was misled.
“I was informed of a 300,000 tons surplus by the association in a meeting on May 11 and that we might even have to export it,” he added.
Azhar further said that the situation suddenly flipped over a month later when the sugar commission’s report hinted at a shortage and recommended a physical verification of the stock.
“We conducted a physical verification in Khyber Pakhtunkhwa (KP) and Punjab and are still waiting for the Sindh government to do so; however, we found that the demand in Punjab increased by two-three times. Obviously, either they were showing us fake receipts or hoarding sugar. This created an impression of a shortage that led to a hike in prices,” Azhar explained.
In response to a question, Azhar said that the government delayed its decision to import the commodity as the commission report had only “hinted” at a shortage.
“We cannot just start buying and importing sugar when the sugar mills association was insisting they had a surplus.”
Copyright Business Recorder, 2020