Sugar in businesses

Karachi: Around 70 per cent of sugar out of country’s total production is being consumed in juices, squashes, syrups, soft drinks, biscuits and confectionery, while the share of households and other customers is just 25-30pc.

A sugar miller said that revenues of foreign multinationals in Pakistan show that they are registering annual growth of 12pc. Overall sugar demand is increasing from 3-5pc a year which includes the foreign firms’ demand.

According to data of large-scale manufacturing (LSM), the country’s soft drinks production rose to 1.75 billion litres in 2012-13 compared to 1.6bn litres in 2011-12. A total of 238 million litres of juices, syrups and squashes were produced in 2012-13 compared to 214 million litres in 2011-12.

In July-September 2013-14, soft drinks production surged to 652m litres from 557m litres in the same period last fiscal. Production of juices, syrups and squashes in July-September 2013-14 jumped to 75m litres from 67m litres from a year earlier.

However, consumers are not getting any benefit from the continuous fall in wholesale prices from last month due to start of sugarcane crushing by the mills from Nov 20, which improved supply situation in the market.

The wholesale price is now quoted at Rs48 per kg which was Rs57.50 per kg last month. Consumers paid Rs62-65 per kg last month at retail stage compared to current rate of Rs50-52 per kg.

However, the retailers are not sharing decline in wholesale price and charging Rs55 per kg from customers in most of the markets.

The overall country’s sugar production is estimated at 6.5m tonnes and consumption will range between 4.8m and 5m tonnes this season.

He said sugarcane production in 2013-14 rose to 70m tonnes from 62.5m tonnes in 2012-13 and 58.5m tonnes in 2011-12. The growth over the last three years in cane and sugar output is because of the government’s fixing of minimum support price which gives farmers better profit than other crops.

The government allowed sugar export of 500,000 tonnes in October and another 500,000 tonnes on Wednesday till February 2014. Sugar export may fetch $500m-550m during 2013-14 depending on world market rates from sugar export of 1.2m tonnes.