ISLAMABAD, Jan 16: Owners of crushing mills and the government are trading barbs as sugar has started disappearing from retail outlets and its price has climbed to the highest-ever level of Rs45 per kilogram.

Before the arrival of the new cane crop in November 2008, sugar was selling at Rs30. The new crop is said to be 20 per cent less than previous year’s harvest.

Additional Secretary of the Ministry of Food and Agriculture Shahid Hussain Raja blamed the Pakistan Sugar Mills Association (PSMA) for spreading rumours about an imminent price rise.

“The speculations are aimed at creating a scare and making unjust profits,” he said, adding that after every meeting with officials of the ministry, the mill owners tried to mislead the public. Accusing the mill owners of trying to blackmail the government, Mr Raja said they had increased the price after the Economic Coordination Committee of the cabinet rejected a proposal for importing raw sugar, adding that they were creating an artificial shortage to put pressure on the government to allow the import.

Acknowledging the decline in sugarcane production, he said that the government had decided to import refined sugar through the Trading Corporation of Pakistan (TCP) from March to meet a shortage likely to hit the country after May.

Mr Raja said that the TCP had 500,000 metric tons of sugar in its stocks and the government had directed the corporation to sell 25,000 tons in the local market every month to help stabilise the price.

It is learnt that officials of the ministry and the PSMA are scheduled to hold a series of meetings to address all issues, including the sucrose content and timely payment to growers.

Meanwhile, PSMA chairman Iskandar Khan has blamed some officials of the ministry for the current crisis and accused them of trying to pocket commissions on raw sugar import.

Mr Khan said that it was illogical to suggest that the import of raw sugar would hurt the interests of sugarcane growers, adding that it took at least two months for delivery after the placement of orders.

He said that domestic sugar production declining to 3.5 million tons this year, about a million tons less than last year’s output, would create a shortage of 125,000 tons.

He said if the government did not curb uninhibited smuggling of sugar to Afghanistan and Central Asian states, the shortage would increase.

He said that most of the smuggling, being carried out on the pretext of Gur export, should be banned.