KARACHI: Wholesale sugar prices have started crawling up after the reopening of the Pak-Afghan border coupled with a costly print media campaign by millers for allowing exports of the one million tonnes surplus commodity.

Wholesale sugar price fell to Rs55 per kg in the first week of March from Rs58-60 per kg in Feb while in Jan it was priced at Rs62 per kg. The wholesale price is now tagged at Rs57 per kg.

Despite a drop in wholesale price earlier this month, retailers passed on the impact to the consumers late. Few days ago, they brought down the price to Rs60 from Rs65 per kg. However, after an increase of Rs2 per kg in wholesale rates, retailers may push up prices.

After a gap of seven months — sugar exports resumed from Feb 2017 with export of 15,885 tonnes fetching $8.7 million foreign exchange. Between July-Jan 2016-17, there were nil exports. In July-Feb 2015-16, sugar exports stood at 166,532 tonnes worth $75m, figures of Pakistan Bureau of Statistics (PBS) stated.

The sugar industry was not satisfied with the approval of 225,000 tonnes for exports by the government in the last week of Dec 2016 based on stocks of 1.23m tonnes in the country.

With a monthly consumption of around 400,000 tonnes, the available stocks are enough to meet consumers’ demand till March.

In an expensive print media campaign, millers urged the govt to allow exports of the one-million-tonne surplus stock

Now, the millers initiated a media campaign claiming that sugar stocks in the country stands at one million tonnes which need to be shipped out urgently to earn handsome foreign exchange.

Despite permission for export of 225,000 tonnes in Dec 2016, sugar industry failed to export any quantity in Jan 2017.

The sugar industry said it does not want export rebate, tax breaks, subsidies or a single watt of power. Rather ‘it wants a chance to compete with the world’.

However, the campaign did not give any road map as to how the industry would get rid of surplus stocks of one million tonnes through exports in view of world market prices.

Chairman Karachi Wholesalers Grocers Association (KWGA), Anis Majeed said the government should allow export of excess sugar quantity held by millers.

This would help earn good foreign exchange as currently India’s crop is not very satisfactory and Pakistan has a chance to export to various foreign destinations, he explained.

Keeping in view the government only allows export of surplus quantity, the millers should ensure regular supplies to the local markets and prices should not spike due to export of surplus quantity, he said.

World sugar FOB price now hovers around $540-550 per tonne.

Country’s sugar production rose by 22 per cent in July-January 2016-2017 to 2.893m tonnes as compared to 2.366m tonnes in the same period last fiscal. Sugar cane crushing season got underway from Oct-Nov 2016.

Sugar millers said bumper cane crop has put excessive financial pressure on mills which now have to make even greater payments to crop farmers. Stuck with a surplus stock of one million tonnes, the industry is finding itself in a serious cash liquidity crunch.

Imports of sugar fell to 8,136 tonnes ($3.4m) in July-Feb 2016-17 as compared to 9,098 tonnes ($4.7m) in corresponding period 2015-16.

Published in Dawn, March 26th, 2017