Sugar rate hike halts

Friday, February 06, 2009

By Jawwad Rizvi

LAHORE: The government’s decision, though late, of importing 200,000 tonnes of refined sugar has for the time being stopped price rise in the wholesale market.However, there are still rumours in the market that the price of sugar will rise above Rs52 per kg as manipulators are trying to take the rate to historic highs, market sources revealed to The News.Manipulators had started pushing up the sweetener’s prices soon after the crushing season kicked off this year. The price of sugar was in the range of Rs2,800 to Rs3,000 per 100 kg at the start of the season.However, the sugar millers taking plea of higher production cost increased the price with the start of production. The millers calculated their production cost at Rs39.37 per kg on minimum sugarcane price of Rs80 per 40 kg.The millers have informed the government that the retail price of sugar for the next season will be in the range of Rs42 to Rs43 per kg, a quantum increase of Rs10 from the current price of Rs32 to Rs33 per kg.A very strong lobby controls the commodity’s trade in the country. Enjoying access to the power corridors, the lobby uses its contacts to influence government’s decisions about import or export of any commodity.In the previous regime, this mafia had successfully pushed the price of sugar to a historic high of Rs42 per kg. “Now it has again managed to get a decision to safeguard their vested interests,” a senior official of the finance ministry revealed. He said the millers were claiming that they had been purchasing sugarcane at Rs125 per 40 kg so they were unable to sell sugar at a lower price.He said a month’s delay in the decision to import sugar would cost $100 million to the national exchequer. He was of the view that government’s timely decision of importing raw sugar could have minimised the loss.On the other hand, the farmers are raising voice regarding sugarcane price. They said they were not getting high sugarcane price as claimed by the sugar milers.Akthar Farooq, Secretary Information Kisan Board Pakistan, said the farmers had not been paid more than Rs80 per 40 kg for sugarcane anywhere in Punjab. “How the millers are claiming Rs125 per 40 kg sugarcane purchase price,” he questioned and said the government could check the millers’ claim by checking Cash Purchase Receipt (CPR) issued by the millers to the farmers.Market sources said currently there was no shortage of sugar in the country then how the price had been going up which negates business dynamics. The price of any commodity increases when the demand is more than the supply.However, in the wake of sugarcane crushing season when the smooth sugar supply is continued showed the failure or involvement of the government in sugar price issue, they added. They said the government should take notice of artificial hike in sugar prices otherwise the manipulators could brought sugar price over Rs50 per kg.