The hike in sugar price is surprising when the country has produced 3,892,141 tons of sugar in July-March 2010-11 as compared to 3,077,866 tons in the same period of last fiscal year. — File Photo

KARACHI: Sugar recorded the first post-budget price hike on Tuesday as its retail rates swelled to Rs68 per kg, while many retailers were charging Rs70 per kg following increase in the wholesale rates.

Karachi Retail Grocers Group General Secretary Farid Qureishi quoted the wholesale rate at Rs66.50 per kg, up from Rs65.50 per kg on Monday, while it was Rs63-64 per kg ahead of the budget announced on Friday last.

The hike in sugar price is surprising when the country has produced 3,892,141 tons of sugar in July-March 2010-11 as compared to 3,077,866 tons in the same period of last fiscal year.

According to figures of Federal Bureau of Statistics (FBS), a sum of $681 was spent on import of 1,027,164 tons of sugar in July-April, 2011 as compared to 334,693 tons valuing $188 million in the same period of last fiscal year.

Karachi Wholesalers Grocers Association (KWGA) chairman Anis Majeed blamed the millers for raising the price. However, he said the mills and Trading Corporation of Pakistan had enough stocks to meet the demand.

In the budget, he said, the government has withdrawn the eight per cent GST on sugar, while imposing eight per cent federal excise duty. The 2.5 per cent special excise duty will disappear from July 1, 2011.

Pakistan Sugar Mills Association (PSMA) chairman Javed Kiani said there was no big reason for price hike of sugar as buying has resumed after the budget.

He said the ex-mill rate in Punjab and Karachi were Rs65 and Rs64 per kg, respectively, and these rates have been raised by only Rs1 to Rs1.50 per kg by the sugar mills.

Mr Javed said that the country had produced 33 per cent more sugar this year to 4.1 million tons as compared to 3.1 million tons last year.

He further claimed that the millers all over the country had also cleared the growers' payment of Rs210 billion and only Rs10 billion is outstanding.

A sugar miller, who asked not to be named, said that the removal of 2.5 per cent special excise duty will result in decline of Rs1 per kg in sugar rates. He said that out of total production of sugar in the country, 70 per cent is consumed by industries, while 30 per cent by general public.