Sugar price increased by Rs 250 on 50-kg bag

[Lahore_Real_Estate]

ABDUL RASHEED AZAD
ISLAMABAD (June 15 2010): Sugar price has increased by Rs 250 on each 50 kg bag of refined sugar and is available at Rs 3180 in the market, which, prior to the budget announcement was available at Rs 2930, shopkeepers revealed on Monday. Traders while talking to Business Recorder said that they were selling the commodity at Rs 62 per kg before the announcement of the budget, but soon after the budget announcement the suppliers increased the price.

The shopkeepers said that they were compelled to revise the price of the commodity upward and currently they are trading at Rs 65 per kg which a few days back was being traded at Rs 62. The traders accused the mill owners of jacking up the price.

During the same period last year sugar price was raised from Rs 30 to Rs 70 by the millers and hoarders. The Supreme Court of Pakistan took notice of the situation but its directives were not implementable, according to authorities.

The government has announced a subsidy of Rs 4 billion on the import of the sugar, and an additional subsidy of Rs 3.5 billion to provide cheap sugar through Utility Corporation of Pakistan (USC) according to budget 2010-11 documents.

As per the plan the government will import 1.2 million tons of sugar this year through the Trading Corporation of Pakistan. Sources in the TCP commenting on the issue said that, so far, TCP had awarded tenders of 0.825 million tons and out of which the corporation had received 0.3 million tons. For the remaining 0.375 million tons, TCP would soon open tenders. TCP would open two tenders for the import of the commodity this month.

They added that out of 0.3 million tons of imported commodity about 50,000 tons had already been provided to the USC, while 50,000 tons would be provided to USC very soon. Sources maintained there is no sugar shortage in the country, adding that the market manipulators have jacked the price of the commodity.

In international market, the sugar price last month touched a low, ie $437 per ton (excluding premium of $80 which is paid on its import) and then again, it inched up and now its price is about $503 a ton with $140 as premium.

Waseem Khan a sugar trader stated that when sugar price in international market was about $800/ton, it was being sold at Rs 60 in the local market, and now when it has come down to $500/ton its local price has gone up. He suggested the government to take rational steps and import refined sugar from the international market, which is available at about 40 percent lower price as compared to the local price.

Mehboob Ali while talking about the role of the USC said that the facility is available to only urban population while majority of the people are in rural areas and it would not benefit them at all. President Pakistan Sugar Mills Association Sikander Khan when contacted said that officials of the Ministry of Food and Agriculture were responsible for the current price hike of the commodity.

He maintained that the hoarders were also behind the current price hike of sugar, adding that the industry was the 2nd largest agro based industry of the country, comprising 81 sugar mills with annual crushing capacity of over 6.1 million tons. However this year the output was 50 percent lower than in the previous year due to shortage of sugarcane in the market.

Asfandyar, an official of the Competition Commission of Pakistan (CCP) said that CCP has nothing to do with fixation of the price of any commodity. He added that under the constitution the commission is empowered to take action in case any industry is involved in cartelization. He stated that the commission is currently probing a case to determine whether PSMA was engaged in cartelization or not.