LAHORE: Sugar millers blame “middlemen” for the rising prices of the sweetener which has become sour for the consumers.

Sugar price has shot up to Rs100 per kg in some areas of the country and it is feared that the rate will further increase with the advent of Ramazan when its usage touches its peak.

The middlemen are fleecing both the consumers and the millers, says the Pakistan Sugar Mills Association (PSMA).

Claiming that ex-mills prices of sugar range between Rs88 and Rs89 per kg, a spokesperson for the association said: “Middlemen fleeced the millers and farmers by artificially raising the prices of sugarcane by purchasing the standing crop in certain areas and making cash payments to certain farmers, whereas sugar millers were bound by the [Punjab] government to make payments through banking channels and were forbidden to make cash payments.”

He said here on Wednesday that the middlemen mafia in sugarcane took birth after the elimination of the zoning system in the 1980s.

“The sugar millers were blackmailed by the middlemen who demanded higher rates for the supply of sugarcane as the government did not intervene to control the mafia leading to higher cost of production of sugar,” the spokesperson said, offering the government full cooperation of the PSMA if asked to, without elaborating whether this cooperation would be to cut prices of the sweetener or action against the mafia.

The major component of the sugar production cost is the price of sugarcane which remained higher with an average of Rs250 per 40kg. Last year it hardly crossed Rs200 per 40kg mark.

A senior Punjab food official says that no more than Rs10 per kg increase in price of sugar is justified for a Rs50 per 40kg hike in sugarcane rate. He says that the manipulation of prices, whether by the millers or traders and middlemen, cannot be curtailed until and unless the cost of production of sugar is officially determined for each mill and a judicious profit margin is fixed for the industrialist, wholesale trader and retailer.

He challenges PSMA claims of blackmailing by the middlemen in the supply of sugarcane and says that the millers in fact purchased around 0.3 million to 0.5 million tons of sugarcane off-the-book through their front men.

Published in Dawn, March 4th, 2021