‘Sugar stocks ample, prices within reach’

ISLAMABAD:

As a sugar crisis continues to haunt the government which has recently ordered strict monitoring of stocks at mills, the food minister on Thursday claimed that everything was in control and abundant sweetener was available in the country.

This comes despite rising prices due to hoarding and profiteering, piling pressure on consumers. Earlier, the government allowed export of sugar and ignored warnings from officials that millers had faced inquiries in the past and further export may again spark a crisis.

Federal Minister for National Food Security and Research Rana Tanveer Hussain emphasised that sugar was available in ample quantities and its price was within reach of the common man.

Addressing a press conference, the minister said that media was portraying a serious sugar crisis and dismissed claims of sugar export first and then its import. “The reality is different except for one or two years, when sugar was exported in large quantities and then imported to meet demand,” he said.

The government allowed sugar export in a phased manner. At the time when the export request was made, the global market price was $750 per ton. When export was permitted, the industry agreed to set the ex-mill price at Rs140 per kg, up Rs2 from the prevailing rate.

Rana Tanveer stressed that usually there was a difference of Rs8-10 per kg between ex-mill and retail prices. However, after export, the local price crashed to Rs119 per kg.

During Ramazan, the minister recalled, sugar was being sold for Rs130 per kg and later the area under sugarcane cultivation increased with expected sugar production of 7 million metric tons.

However, due to the impact of climate change, not just in Pakistan but globally, agricultural yields were affected. Despite an increase in the cultivated area, sugar production fell. “As soon as we learnt about the shortfall, the prime minister halted the remaining export and 40,000 tons were not exported,” the minister said.

He stated that this year, the country produced 6.3 million metric tons of sugar, which was sufficient to meet domestic needs. Farmers have received between Rs4,500 and Rs4,750 per ton for sugarcane.

He blamed hoarders and dealers for price increase, adding that strict action was being taken against them. At present, sugar is being sold for Rs173 per kg. He also drew regional comparisons, saying sugar was priced at Rs150 per kg in India, Rs187 in Bangladesh, Rs173 in Afghanistan and Rs250 in Iran.

The minister disclosed that Pakistan earned $450 million by exporting sugar at $500 per ton. “Had we exported at $750 per ton, we would have earned even more foreign exchange,” he noted. Export permission was granted for 7.5 million tons, while imports were allowed up to 500,000 tons. “We are currently importing 300,000 tons and will not purchase more than that,” he clarified.

He assured the public that sugar stock was available in adequate quantity and there was no shortage. “Prices have been fixed, although slight variations may occur in some areas. A three-month agreement has been signed with mills, allowing a maximum increase of Rs2 per kg and setting the ex-mill price at Rs175 per kg. Fresh sugar production will soon reach the market, which will stabilise prices.”

Millers claim sugar sale at Rs165

Separately, the Pakistan Sugar Mills Association (PSMA) said that all mills were supplying sugar at Rs165 per kg and the country had ample stocks till mid-November.

In a statement, a PSMA spokesman argued that the sugar supply chain had been affected due to divergent administrative measures taken by some government institutions, “which have somewhat been redressed and supply is continuing”.

Mills are only concerned with ex-mill prices, while the retail price is normally determined by market forces, which are now being controlled by the government. As per media reports, sugar is being sold for Rs200 per kg, but according to the industry information, the commodity is available in most markets at Rs173 to Rs175 per kg.

The spokesperson clarified that sugar dealers were buying from mills at Rs165 per kg and instead of selling to domestic consumers, they were supplying to industrial and commercial consumers at higher profits.