KARACHI, July 26: Sugar has become costlier by one rupee per kg as consumers are getting it at Rs21 as against Rs20 sold just two days ago. The wholesale price has also climbed to Rs2,000 per 100 kg bag from Rs1,900.
Karachi Retail Grocers Group general secretary Mohammad Farid Qureishi said: "Sugar prices has been under pressure for the last 25 days but this marked rise is surprising."
However, Karachi Wholesale Grocers Association chairman Anis Majeed terms the price hike an artificial move ahead of Shab-e-Barat and Ramazan when demand of the commodity rises.
"It seems that some stockists and vested interests have become active by hoarding the stocks to make windfall during the two religious occasions in the next two months," he said. He said millers had actually increased the price while hoarders had engaged themselves in piling up stocks.
Mr Majeed said the market situation was going normal, but in the last three to four days prices witnessed a marked increase despite no hectic demand from the consumers. He added that the reason for a price flare-up was very strange when millers had enough stocks in their hands.
Sources said that the markets were abuzz with reports over a possible drop of 15-20 per cent in sugarcane crop this season followed by a decline in sugar production due to reports of low sugarcane cultivation this year caused by thin water scarcity.
However, a spokesman for the Pakistan Sugar Mills Association (PSMA), Sindh Zone, said that it was too early to predict a decline in the production of sugarcane and sugar. Even he did not agree that sugar prices have gone up in the last few days.
He agreed that low water availability in the production areas of Sindh might have a negative impact on the sugarcane crop, but it was hard to forecast a decline in the crop at this moment.
He added that almost all the crops had been facing water scarcity problems. According to PSMA figures of last week, sugar millers had an unsold stock of 1.766 million tons. Sugar lifting was estimated at over 2.314 million tons, leaving an unsold stock of 1.706 million tons.
The mills produced more than 4.020 million tons of sugar during the year 2003-04, of which 1.221 million tons were produced in Sindh, 2.599 million tons in Punjab and 176,252 tons in NWFP.
The Trading Corporation of Pakistan has over 450,000 tons of sugar of the last season for export purpose but in view of upcoming sugar crisis, it seems that the government has to revise its export strategy. The stocks of 450,000 tons are seen as buffer stocks.
