The retail sugar prices have climbed from Rs. 100 to Rs. 140, showing an increase of Rs. 40. Meanwhile, the wholesale prices per 50 kg bag have increased by Rs. 2,000, rising from Rs. 4,500 to Rs. 6,500 in a span of three months.
According to a notification, the sugar prices have been hiked against the recommendations made by the Sugar Advisory Board (SAB) and Ministry of Food Security and Research (MNFSandR) which notified the price of Rs, 98.82 per kg in April 2023.
The notification states that sugar jumped 30 percent in the current month, and it’s imperative to regulate its pricing in the wider public interest. While it also reveals that SAB approved prices recommended by MNFSandR in its 6th meeting on April 17, 2023, after getting input from Pakistan Sugar Mills Association and provincial governments.
Though Pakistan Sugar Mills Association (PSMA) had asked for more time instead of providing inputs.
After Punjab and Sindh increased the sugarcane minimum support prices to Rs. 300 and Rs. 302 respectively, the retail price increase was expected. But after the Sindh government’s announcement in March that it will increase the rate of the new sugarcane crop to Rs. 450 per kg which would take commodity prices to Rs. 150 per kg.
“Market may come under temporary pressure due to media and government with per bag reduction of up to Rs. 200 per bag but it will be a small correction” stated a trader talking to ProPakistani. He added that the sugar market prices in wholesale will remain stable here in the long term.
PSMA Chairman Iskandar Khan blamed the artificial curtailment of prices that resulted in smuggling that fuelled the local price increase while increases in fertilizer, pesticides, diesel, water, tractor, and other farming-related expenditure also played its part while he also said that the sugarcane cultivated area has also declined by 10 percent.
He also said that 20 percent GST and 28 percent interest rates with are also to be considered high utility costs and high transportation costs that have increased the sugar prices despite the country having significant sugar stocks. He also argued that Pakistan has still the cheapest sugar available globally while the government is still looking to increase the minimum support price.
The sugar industry constitutes six percent of manufacturing and 13 percent of the agriculture economy and contributed Rs. 501 billion in 2021. Pertinently, the minimum support price of sugarcane has been increased by Rs. 126 per 40 kg in 2011 to Rs. 300 per 40 in 2022 while sugar production increased by 36 percent against a 42 percent increase in demand.
The sugarcane farmers still encounter delayed payments or sometimes lower prices despite the government-announced minimum support price.
Source: Pro Pakistani