KARACHI: Some greedy retailers have pushed up the retail price of sugar to as high as Rs180 per kg from Rs170 by attributing the hike to rising wholesale prices.
A retailer said the wholesale rate for sugar had risen to Rs168 per kilogram from Rs153 per kg two weeks ago.
The average national price of sugar last month was Rs145-160 per kg, but it continued to crawl up in the lead-up to Ramazan and has kept rising even during the holy month. In the first week of January, the average price ranged between Rs130 and Rs150.
But some retailers who purchased huge stocks at lower rates in bulk months ago, must now be enjoying windfall profits by selling sugar at current rates.
Rauf Ibrahim, the chief of Karachi Wholesalers and Grocers Association (KWGA)), said “I find the government’s decision-making process baffling”.
First it allowed the export of sugar when the wholesale rates were Rs125-130 per kg, Mr Ibrahim recalled. “But after a persistent rise in wholesale and retail rates, the government has now allowed the import of raw sugar to bring down retail prices.
“This formula of allowing raw sugar import will not work as millers do not have the technology to convert raw sugar into fine sugar,” he said. “Mills can make sugar only by crushing sugarcane.”
Rauf Ibrahim said another way to bring down prices is to allow import of refined white sugar tax-free. The commodity costs $520 per tonne in the world market. Since this translates into Rs150 per kg, prices will surely come down if import is allowed, he added.
“The move will also force hoarders to bring out their stocks. So far no serious efforts have been made to give a tough time to hoarders.”
Pakistan exported 757,597 tonnes of sugar during the first seven months of FY25, earning $407 million, as against $21m for 33,101 tonnes during the same period of the previous fiscal.
The average per tonne price had dropped to $537 in 7MFY25 from $636 in the same period of the last fiscal.
However, a spokesperson for the Pakistan Sugar Mills Association (Punjab zone) did not provide the rising ex-mill rate in the last 20 days, saying that “every miller has its own rate”.
‘Don’t blame exports’
However, the spokesperson disagreed with the perception that sugar prices had shot up due to exports.
The industry was not allowed to export the commodity for two years in order to keep a lid on prices at home, causing “liquidity problems”, the spokesperson added. At the end of September last year, sugar mills had two years of surplus with them _ almost 1.5m tonnes valued at Rs250 billion. This was pledged with banks at an interest rate of 25pc, he explained.
Since the storage life of sugar is only two years, it becomes unfit for human consumption after that. It is an international practice that whenever the local production of a commodity exceeds demand, it is exported.
Almost 50 per cent of the total quantity of sugar available was sold much below the cost of production, causing massive losses to the industry. “Production of surplus sugar every year, coupled with ban on its export, is a big burden on traders,” the spokesperson said.
Published in Dawn, March 13th, 2025
