KARACHI: Sugar consumers have been enduring high prices particularly for the last seven years during which the commodity retail cost increased to more than double of the level prevalent in the year 2000. This mainly owes to lack of government’s administrative role to check hoarding and profiteering at production and wholesale levels.

Abrupt price hike in essential food items, including the sweetener, the most important ingredient to daily meals, drinks, desserts etc has been impacting household budgets resulting in reduced consumption by the low income strata multiplying their economic deprivation, remarked an economic expert critical to the government’s measures taken to cope with the artificially-created sugar crisis.

The economic expert, who refused to go on record, told Dawn the sugar industry was operating on free market principle to determine wholesale and retail rates of refined sugar and added that there was no rationale behind skyrocketing of the sweetener prices.

“It is the duty of the government to protect the interest of the end-consumers and there is a complete administrative system, besides rules and regulations to check hoarding, profiteering, and other bad practices of the millers, wholesalers, retailers etc. But unfortunately, the non-functionality of regulatory departments in addition to rampant corruption and lack of fear of accountability can rightly be blamed for prevailing sugar crisis,” he lamented.

The economic expert further said that the some ill-conceived decisions of the government were equally responsible for this pathetic scenario that included allowing of duty-free import of raw sugar by mills only giving them a chance to fleece the consumers again that had exposed the sincerity of the economic managers for bringing down local prices.

“That decision indicates how influential and powerful the sugar millers are as many MNAs and even sitting ministers are among the mill owners,” he remarked.

He pointed out that the cane crushing started in November and lasted for over three months, but no government department had the courage to ask these millers why around 89 per cent of sugar stock was lying in their mills in April. This means they were deliberately releasing the commodity in small quantities to keep prices at the prevailing higher levels.

He admitted that the government had tried to influence the sugar price indirectly by allowing Trading Corporation of Pakistan to import the commodity and offered it at subsidised rates through utility stores, but this had little impact on prevailing prices in the open market as the USC did not have that much vibrant network to meet the demand alone.

He suggested stringent enforcement of anti-hoarding law and effective administrative check would greatly help in smoothen up the supply line that would also keep prices stable.

Pakistan Sugar Mills Association (PSMA), Punjab Zone Chief Zaka Ashraf talking to Dawn from Lahore said the millers were suffering colossal losses owing to bad policies of the economic wizards of the country.

He said that allowing massive imports despite local production of 3.6 million tons left no justification for this decision as the total domestic consumption stood at 3.9 million tons and there was a shortfall of around 300,000 tons only.

“The per kg cost of production has risen to Rs31 following 33 per cent increase in minimum wages and identical raise in sugarcane support price by the government during the current fiscal has made it very difficult for mills to continue their operations,” Mr Zaka asserted.

He added that the situation had pushed the mills into deep financial quagmire as they had not been able to pay Rs13-15 billion dues to cane growers. “Many mill owners in Punjab and Sindh have decided to dispose of their units.

Karachi Wholesalers and Grocers Association (KWGA) president Anis Majeed told Dawn that they procured sugar from the brokers and not directly from the mills and sell it to retailers after adding small margin of just 20 to 50 paisa per kg.

He said the current ex-price of the sweetener was Rs27-27.50 per kg and was being offered to retailers at Rs28, who sold the commodity to the consumers between Rs29-30 per kg.

He, however, was reluctant to disclose how much money the brokers made for their role as middlemen between the wholesalers and mills.