PSMA cites closure of FBR portals and state restrictions on dealers as reasons
The Pakistan Sugar Mills Association (PSMA) said the recent increase in sugar prices is due to the closure of FBR portals and restrictions imposed by the government on dealers, including bans on inter-provincial transportation.
The Wholesale Grocers Association had previously accused sweets of driving up prices. They had termed the current rise in sugar prices an “artificial crisis”, alleging that despite a bumper sugarcane crop and imports, there had been a deliberate delay in sugar supplies.
The PSMA statement said the industry had long warned that gate closures would reduce the supply of sugar and had alerted the government that such closures would lead to price hikes. The government, however, continued to pressure factories to sell unnecessarily imported sugar.
The association adds that the majority of the public does not prefer imported sugar. In Sindh, gates remained closed so that sugar imported at the port could be sold first. Since these restrictions were imposed, the supply of sugar has started to decline.
Read: Wholesalers call rising sugar prices an “artificial crisis”
These measures have caused a rise in sugar prices, for which the sugar industry is not responsible. In Punjab, district administrations forced mills to sell sugar to government-appointed dealers, who then sold it at higher prices in the market for their own profit, the statement added.
The press release concludes that the arrival of new sugar on the market should stabilize prices. He called on the government to lift unconstitutional and illegal restrictions on interprovincial transportation of sugar.
Wholesalers and Grocers Association President Rauf Ibrahim told The Express PK Press Club that the crisis has been “systematically engineered” as only 10 per cent of sugar mills have started grinding, while the remaining 90 per cent are yet to start operations despite the season being in full swing.
According to Ibrahim, the ex-factory price in Karachi increased from Rs 175 to Rs 185 per kg, the wholesale rate reached Rs 187 and the retail prices crossed the Rs 200 mark. In Punjab and KP, sugar is sold at Rs 200-210/kg.
Learn more: Closure of the portal and import policy blamed on the rise in sugar prices
Repeated warnings
A special meeting of the Sugar Advisory Council was held in October, under the co-chairmanship of Deputy Prime Minister Ishaq Dar and Federal Minister for National Food Security, Rana Tanveer Hussain, to review the sugar market situation, stocks of imported sugar and closure of the S-Track portal.
In a statement issued in October, the PSMA had said that the government’s policy of prioritizing the sale of imported sugar and closing the Federal Board of Revenue (FBR) portals for local sugar sales had triggered the recent price surge and shortage of supply in the market.
Also read: Sugar industry confirms stable supply and rules out shortage
They informed the meeting participants that the industry had repeatedly warned the government against importing unnecessary sugar, but around 300,000 tonnes were still being imported. Today, the government is finding it difficult to sell imported sugar and, as a result, the portals for selling local sugar are blocked.
The industry also told the minister that the PSMA had been warning authorities for weeks, through letters and press releases, that keeping the gates closed would lead to shortages and price increases. However, these warnings were ignored. The representatives had stressed that the national sugar industry was not responsible for the price rise and that traders and profiteers were the main beneficiaries.
