By Staff Reporter
ISLAMABAD: Pakistan has approved the import of 500,000 tonnes of sugar to tackle a domestic shortage and stabilise skyrocketing prices, a move that comes after a massive export boom left local supplies depleted and consumers facing a 36 percent price hike.
The move comes after sugar exports soared 2,200 percent in the last fiscal year, with 765,734 tonnes shipped between July and May, generating Rs114 billion in revenue. While the export windfall bolstered Pakistan’s foreign exchange reserves, it has wreaked havoc on the domestic market.
Retail sugar prices have climbed to Rs190 per kilogram from Rs140, driven by a 14 percent drop in production to 5.9 million tonnes this year, hit by adverse weather and reduced cane yields. With annual consumption at 6.4 million tonnes, current stocks of 2.8 million tonnes are projected to last only until November, the Pakistan Sugar Mills Association (PSMA) said, based on a monthly demand of 535,000 tonnes.
Deputy Prime Minister and Foreign Minister Ishaq Dar, who led a committee meeting on Tuesday to address the crisis, underscored the need for swift action.
“The committee approved the import of up to 500,000 metric tonnes of sugar to ensure a stable supply and maintain affordable prices nationwide,” according to a statement posted on X.
Dar emphasized the government’s focus on “price stability and safeguarding consumer interests.”
The Ministry of National Food Security and Research confirmed that import arrangements are finalized and underway. “This step was taken to maintain balance in sugar prices,” the ministry said in a press release, contrasting its strategy with past reliance on subsidies that it claimed artificially tightened supply and strained public finances.
“This step was taken to maintain balance in sugar prices. The approach to importing sugar represents a different and clearly better strategy than that of past governments. In the past, subsidies were often relied on to create an artificial shortage of sugar, burdening the national treasury. The current government decided to export sugar at a time when sugar was available in abundance.
The government in past defended its earlier export policy, noting that sugar was shipped out at a time when sugar was available in abundance. Now, imports are deemed essential to offset the shortfall. The 500,000-tonne shipment, priced at Rs153 per kilogram (excluding duties), offers a Rs37 discount to the domestic peak, providing a cost-effective stopgap.
The government’s initial green light for exports has drawn flak. Critics argue it favored sugar millers’ profits, bolstered by the Rs114 billion windfall, over consumer affordability. The PSMA, long accused of cartel-like practices, has suggested measures like cracking down on smuggling and advancing the next crushing season to ease supply woes. Skeptics, however, see these as bandaids on a self-inflicted wound.
Copyright © 2021 Independent Pakistan | All rights reserved
