KARACHI, June 28: Sugar price continued to scale new peak on the back of surging rates in the wholesale market, rising to Rs68.50 from Rs66.50 per kg in the last three days.

Retailers, who must be having enough stocks at their outlets, were quick to push up the rates to Rs70-72 per kg in various areas from Rs68 per kg blaming hike in wholesale rates.

While the government is engrossed in political turmoil, the market players and producers are enjoying a field day to play havoc with the prices ahead of Ramazan.

The sugar price had been boiling soon after the budget when its wholesale rate had reached Rs66.50 from Rs65.50 per kg. Before the budget it was selling at Rs63 per kg at Jodia Bazaar and Rs65-66 per kg at retail markets.

The Karachi Wholesalers Grocers Association (KWGA) chairman Anis Majeed said the Trading Corporation of Pakistan (TCP) had issued a tender last week to lift 50,000 tons of sugar from the local mills. It is not a big quantity but it has definitely created some support to the millers to push up the rates.

He was of the view that the wholesale market ahead of the budget faced a dull session and after the budget some buying activity had emerged.

In the budget, the government has withdrawn the eight per cent GST on sugar while imposing eight per cent federal excise duty.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 discontinue from July 1, 2011.

He said the discontinuation of special excise duty will result in decline in price of sugar by Re one to Rs1.50 per kg but it may not benefit much to the consumers in view of rising prices after the budget.

According to Federal Bureau of Statistics the country has produced 3.8 million tons of sugar in July-March 2010-11 as compared to 3.1 million tons in the same period of last fiscal year.

Import of sugar in July-May, 2011 soared to 1,028,597 tons worth $682.3 million as compared to 420,510 tons valuing at $243 million in the same period of last year.When asked why sugar is costlier despite higher imports as well as local production, he said the government should check the prices from the farmers to retail stage.

According to Economic Survey 2010-11, sugarcane was cultivated on an area of 988 thousand hectares, 4.8 per cent higher than last year’s level of 943 thousand hectares. Its production for the year 2010-11 is estimated at 55.3 million tons as against actual production of 49.3 million tons last year. This indicates a rise of 12 per cent over the production of last year.

The survey said main factors contributing to higher output were lucrative market prices of last year’s produce and timely availability of inputs encouraging the farmers to grow more sugarcane crop.