By Staff Reporter
ISLAMABAD: The government has set the ex-mill price of sugar at Rs165 per kilogram, a Rs25 hike from last June’s rate, as it grapples with skyrocketing retail costs and aims to steady a volatile market, the Ministry of National Food Security and Research said on Monday.
The decision, reached in agreement with the sugar industry, comes as retail prices have soared to as high as Rs200 per kg in cities like Karachi and Peshawar. In an statement, the ministry said the new ex-mill price is meant to ensure affordability. “All provincial governments will ensure the availability of cheap sugar to the public in light of this decision,” the statement read.
Yet, despite the fixed ex-mill rate, sugar remains pricier in open markets. Retail shops across the country continue to sell the commodity at rates well above Rs165 per kg, a sign of persistent supply pressures and market instability.
Earlier this month, the ministry pressed provincial authorities to act. “Provinces must take action to ensure that the public gets access to affordable sugar,” it had warned in a statement.
To tackle the crisis, the federal cabinet recently greenlit the import of 500,000 tonnes of sugar through the public sector, a plan the ministry confirmed is already in motion.
Officials framed the move as a sharp departure from past policies, which they claim allowed artificial shortages to inflate prices and secure subsidies. “This import is a genuine corrective step rather than a politically driven measure,” the ministry said, noting that an earlier decision to export sugar had been made when domestic reserves were plentiful, a situation upended by the current price surge.
The strategy has sparked pushback. The Pakistan Sugar Mills Association (PSMA) contends that existing stocks can sustain the country until November, calling the imports unnecessary and a potential blow to local producers.
Fawad Hassan Fawad, a senior leader of the Pakistan Muslim League-Nawaz (PML-N) and confidant of Nawaz Sharif, echoed the scepticism, questioning the timing and beneficiaries of the decision, a veiled jab at the government’s economic stewardship.
The import push follows the Trading Corporation of Pakistan (TCP) issuing an international tender last week to buy 300,000 to 500,000 metric tons of white refined sugar. Bids are due by July 18, with the sugar, sourced globally and packed in bags, requiring a minimum offer of 25,000 tons. The TCP retains flexibility to adjust the purchase volume, traders said, with shipments slated to arrive in August consignments.
Market analysts trace the price spiral back to January, when retail rates surged 36% to Rs200 per kilogram from Rs140 since January, a spike fueled by a 14% drop in domestic production to 5.9 million metric tons this year, hampered by adverse weather and reduced cane yields.
Compounding the crisis, sugar exports soared 2,200% in the last fiscal year, with 765,734 metric tons shipped between July and May, generating Rs114 billion in revenue. While the export windfall bolstered foreign exchange reserves, it gutted local supplies.
Copyright © 2021 Independent Pakistan | All rights reserved
