While everybody was busy scrutinizing federal and provincial budgets, capital gains tax, VAT and what not, sugar players were busy jacking up prices yet again.
The price of the common sweetener has been increased by Rs5/kg, after wholesalers propped up prices by Rs250 on the 50-kg bag to Rs3,180, and with this a new saga looks set to be brewing.
Sources reveal that about 1.8 million tons of sugar stocks are currently lying with the millers, but they don wish to sell until the prices are
ight.
Reportedly, average cost of sugar production this year has been around Rs58/kg, up from Rs31/kg last year, owing to higher sugarcane prices, that averaged around Rs230 per 40 kg, according to millers.
How far that is true, is, of course, difficult to find out unless a through investigation is launched; but based on average cane prices quoted by official sources, the cost of sugar production might just be around Rs48/kg.
Sources say that cane was sold at an average Rs190~195 per 40-kilogram, as against the millers claims of Rs230 per 40-kilogram.
Still, whether the millers are maneuvering with numbers or not, there may be some respite in the offing for retail consumers.
The weighted average landed cost of imported sugar is about Rs54/kilogram, according to Anjum Bashir, Chairman TCP, who sees global sugar prices tapering off until December.
International sugar prices have been sharply down, as markets have adjusted to better-than-expected production in Brazil and India. As a result, the FAO expects world sugar production to rise to 156.3 million tons in 2009/10 from 151.1 million tones the year before.
"After reaching a 30-year high average of US 26.46 cents per pound (USD 583 per ton) in January 2010, international sugar prices retreated slightly in February to US 25.43 cents per pound before commencing a steady downward trend," FAOs latest Food Outlook points out.
These developments imply that millers should think twice before increasing their prices, as sugar imported by private parties can give them tough competition.
Yet, so long as the millers enjoy political patronage, as highlighted by the Competition Commission Pakistan in its latest assessment study released Monday, they might still have their way.