ISLAMABAD: Sugar price in the country within the past one month has registered an increase of Rs20 per kg in the retail market, while in the wholesale market, the commodity price has jumped from Rs4,500 per 50-kg bag to Rs5,600 per bag.

Business Recorder has observed that in the past six weeks, the commodity prices were kept on steadily increasing in the range of Rs100 per bag to Rs200 per bag weekly, which has now reached the highest level of the current season.

Last year in November following an increase in sugarcane support price from Rs230 to Rs300 in Punjab and from Rs250 to Rs302 per 40-kg in Sindh, it was expected that the sugar price may go up. Recently, Manzoor Wassan, the Adviser to the Chief Minister Sindh on Agriculture has said that the Sindh government has decided to fix the rate of new sugarcane crop at Rs450 per 40kg. He said that the decision has been forwarded to the provincial cabinet for final approval, if approved and implemented it will take the commodity’s retail prices to cross Rs150 per kg mark.

When contacted, the Pakistan Sugar Mills Association (PSMA) office bearer Iskandar Khan, giving the reasons behind the hike in sugar prices, said that there are three reasons behind the sugar price increase (i) government has imposed 20 percent tax; (ii) 22 percent interest rate and (iii) hike in sugarcane price.

The sugar industry comprises six percent of the manufacturing sector and 13percent of the crop economy. The sugar sector provides direct employment to one million people and has a market size of Rs501 billion as of 2021. The government has continuously increased the support price on sugarcane from Rs126 per 40kg in 2011 to Rs300 per 40kg in 2022 to incentivise the farmers to increase sugarcane production. Since 2011, sugarcane production in the country has shown a cumulative growth of 36 percent compared to a 42 percent growth in the demand of the commodity.

Also, sugarcane cultivation as a percentage of the total cropped area increased from 4.3 percent in 2011 to five percent in 2021.

Copyright Business Recorder, 2023