Sugar issue gets bitter again

The callous sugar cartel was in operation again attracting other cartels dealing in edibles and consumables. The result is that sugar prices rose to record levels in various parts of the country giving way to clarifications issued by governmental decision makers who were responsible for governance since the last many years.

This practice unfortunately is constantly repeated making life miserable by the day for the people of Pakistan. The renewed spiral of price increases has simply unnerved almost all segments of society whose ability to pay has long evaporated. The decision makers are consistently ignoring the crucial dictum that people take financial burden to a certain level and when the threshold is crossed then people get restive and open to rise up against authority.

It is quite clear that the people have reached end of the tether as was borne out by the recent protests against inflated electricity bills though they were dismissed as inconsequential by the caretaker chief executive of the country exhibiting the typical tendency of hiding head in the sand.

The recent price hike in sugar has brought it in the range of Rs.200 per kilogram and it is feared that it may well go up. Already struggling to find ways to pay inflated electricity bills, consumers suffered another shock due to a further hike in the prices of sugar.

Just days after the takeover of the new caretaker government, consumers had seen a Rs.8 per kg rise in wholesale prices of sugar to Rs.153 per kg thus pushing up the retail rates up to Rs.160 per kg and up to Rs.170 per kg in online stores. Wholesalers further raised the rate by Rs.4 per kg to Rs.157pushing up retail prices to Rs.170 per kg.

At online stores, sugar rates are now quoted at Rs.172 per kg while some stores are offering the 500g pouch at Rs.95 which means two bags or one kg would cost Rs.190 per kg. In various cities, the average national price of sugar was hovering at Rs.155-172 per kg during the week.

These fears appear justified in wake of the caretaker government expressing alarm over depleting sugar stocks after a meeting of the Economic Coordination Committee (ECC) of the Caretaker Cabinet was told that only 2.27 million tons were available in the country. Rising sugarcane prices and court orders were also seen as being behind the rising price of sugar.

Moreover, the flurry of blames also indicates that the issue has the strong potential of not only proving problematic for the incumbent caretakers but may also very seriously harm the electoral prospects of the political parties who remained involved in governance since the last many years. In this context, members of 16-month-old coalition government comprising Pakistan People’s Party (PPP) and Pakistan Muslim League-Nawaz (PMLN) started blaming each other for the price hike.

Senator Taj Haider of the PPP claimed that Rana Sanaullah of PMLN allowed 1.4 million tons sugar to be smuggled lamenting how ex-planning minister Ahsan Iqbal had held his former cabinet colleague Naveed Qamar responsible for the crisis. On his part, Ahsan Iqbalclaimed that Naveed Qamar should be asked to answer questions about the export of sugar in previous months and that he would be better placed to say how much sugar was available in the country’s stocks when his ministry gave the go-ahead for its export.

Despite the political infighting the growers are not convinced by either side’s argument as they blame everyone part of the past government for the fresh crisis and point out that it was almost exactly a year ago when the smuggling of the sugar started under the nose of the government. It was mentioned that a 100-kg bag was available at Rs.8,400 in August 2022 and today it is worth Rs.18,000.

They claim that some 700,000 metric tonnes sugar have already crossed border into Afghanistan and some 300,000 metric tonnes to 400,000 metric tonnes are dumped in godowns in towns along the border. Commodity exporter/importer mention that local sugar is finding way into Afghanistan and Iran through illegal channels, while hoarding and speculation of sweetener is also at its peak to make further windfall. It is feared that more pressure would come on sugar prices in the region as India is reported to have imposed a ban on sugar exports.

Pakistan’s sugar export during FY23 stood at 215,751 tons fetching $104 million against nil exports in FY22. Exports during July 2023 were 5,542 tons that earned $3.4 million as compared to zero exports during July 2022. It was reported that ten additional check posts of law enforcement agencies will be set up to curb smuggling of essential commodities in Balochistan. Moreover, border markets with Iran are to be made more viable so that trade with Iran could be done with proper documents.