Sugar is being sold at Rs 85 to 100 per kg all over the country.
The government has fixed its rate at R s63 to 70. (As Rs 63 has
been rejected by the sugar millers, later Rs 70 per kg was agreed between the
government and the millers.)
In December 2018, the first year of the Pakistan Tehreek-i-Insaf,
the white sweetener’s rate was Rs 55 per kg.
Then something strange started happening well before the start of
the crushing season that sugar’s rate gradually went up.
Sugar is becoming sour day by day. Tough days are ahead for sugar
consumers as sugar suppliers may run short of supplies
The public complains the commodity which is almost all Pakistanis’
kitchen vital part is becoming out of reach. The government looks worried.
Chief Minister Usman Buzdar has ordered the food secretary to take
measures to ensure that sugar and flour are available, sufficiently available
and available at official rates.
It should not have been an impossible task given the power of the
government to enforce its writ.
No. NO.
The government has miserably failed to comply with the chief
minister’s orders.
But why?
Government’s actions
On Thursday (July 23), Punjab Food Secretary Asad Gilani
visited Muzaffargarh where sugar’s normal price is Rs95 to 100 per kg.
Muzaffargarh is home to four sugar mills – Fatima Sugar
Mills, Sheikhu Sugar Mills, Tandlianwala Sugar Mills and Haseeb Waqas Sugar
Mills (sealed on the Supreme Court orders).
“Well, I’m here to order the district administration to check
the stock of sugar mills and flour mills,” he tells Daily Pakistan.
“I’ve asked the district officer industry and the district
food controller to check the electric meter of mills and start of crushing
season dates. Moreover, I’ve formed teams to check sugar stocks in mills.”
Sir, why is sugar being sold at inflated rate?
“I’ve asked the district administration to look into it as
there is no issue of the availability of the stock. Up to 960,000 metric tonnes
of sugar is available in Punjab alone and of the available stocks, 16,000
metric tonnes are being sold in Punjab on a daily basis. When the supply is
sufficient, deputy commissioners should check it ensures the availability of
sugar as well as flour on the official rate. And I know it is being sold at
official rates.”
He said his teams would see if the commodity was being
smuggled to other provinces.
Deputy Commissioner Amjad Shoaib Tareen said that in
Muzaffargarh district there are 24 sales points of sugar as 112,000 metric
tonnes had been stocked here while 115,000 metric tonnes of sugar had been sold
in the first seven months of the year.
What do sugar millers say?
Javed Kiani is the Pakistan Sugar Mills Association president. He
led a delegation to meet Federal Minister for Industries and Production Hammad
Azhar in Islamabad earlier this week.
“We met Hammad Azhar to discuss the issues related to Sugar
Advisory Board meeting,” he tells this scribe.
“We told the minister about the physical verification of the
stocks. We have no issue with it. The real issue is the reporting of cane
commissioners about the available stocks. Their reports are flawed and have no
salt or meat. We asked the minister to get the physical verification of mills’
balance of production stock.”
What about the available stocks?
“Well, we have 1.6 million metric tonnes stock available”
Is it enough to meet local needs?
“No. The government needs to import three million tonnes at the
earliest, otherwise the government will be repeating the last year’s mistake
for banking on the wrong figures.”
Why is sugar not available at official rates?
“This is a good question. Look, this year, the crop was short and
for that reason, while its official rate was Rs 180 per 40kg, which later rose
to Rs210 and some cases Rs 240 to 250. This cost us sugar Rs 83-84 per kg.
Naturally, these things made it hard for us to sell the commodity at Rs 63 or
even Rs 70.”
If the government imports three million tonnes of sugar, will it
solve the problem?
“One will never know. You know the international price of sugar is
$350 per tonne, which makes it landed cost Rs 84 per kg at the Karachi port. If
you buy it from Gulf, its landed cost is Rs 91, while Brazilian sugar cost us
Rs86 per kg at the port. Now, add up its packaging and transportation cost, it
will be sold at Rs 95 to 100 per kg.”
What is the long-term solution to stabilize sugar prices?
“The cure lies in deregulating the sugar sector. The government
should stop fixing the support price of the yield. There should be market
economy rates of the crop. Government’s intervention should be less and less.
This will benefit both farmers and millers.”
What do farmers and sugar dealer say?
Dr Khalid Mahmood Khokhar, president of the Pakistan Kissan
Ittehad, says the government should immediately bring down the price of sugar,
and take strict action against the sugar mafia. He says sugar millers have
robbed people of Rs 85 billion in one and a half year. He says the sugar
inquiry commission report should be implemented as “embezzled money belonging
to sugar cultivators should be returned to them and strict action should be
taken against the sugar mafia".
On the other hand, Malik Javed, sugar dealer's association
president of Lahore, says that ex-mill rate of 100 kg sugar is Rs 7,750 while
they sell it at the same rate, which makes it Rs 85 per kg.
Sugar crisis and inquiry commission report
When the sugar prices started registering a gradual increase in
2019, Prime Minister Imran Khan made an inquiry commission under the FIA
director general, Wajid Zia, to probe into sugar and flour shortage. In April
last, the inquiry report hit the press. It shook both treasury and opposition
benches as prominent politicians, who happened to be the owners of sugar mills,
had minted billion in export rebate by the government while the commoner had to
pay a heavy price in terms of price hike. So far, it is estimated, the sugar
consumers have paid almost Rs 85 billion to millers. Of them, according to the
commission, PTI’s Jahangir Tareen’s Jamal Din Wali group got away with 19.97
percent, Makhdoom Khusro Bakhtiar’s brother Omer Sheryar ‘s RYK group 12.24
percent, Al-Moiz group 6.8 percent, Sharif family 4.54 percent, Omni group’s
share is 1.66 percent and so on.
What’s
going to happen with sugar prices now?
Since the international market
is selling sugar at Rs 86 to 91 per kg, and Pakistan has to import the
commodity, the white sweetener is going to poison the economy of both the
commoners and the government. It is going to cross the figure of Rs 100 per kg
soon.
The government needs to give
subsidy to farmers for cheap production of sugarcane and a lower price of
sugarcane will ensure lowering the prices of sugar.
The other way to fight the
sugar crisis is in less usage of the commodity. This will improve both health
and wealth of the consumers.
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