PSMA cites closure of FBR portals, state-imposed restrictions on dealers as reasons
The Pakistan Sugar Mills Association (PSMA) has stated that the recent rise in sugar prices is due to the closure of FBR portals and government-imposed restrictions on traders, including inter-provincial transport bans.
The wholesale association had previously accused sugar mills of driving up prices. They had termed the prevailing sugar price hike an “artificial crisis” and claimed that despite an unfavorable sugarcane crop and imports, there has been a deliberate delay in sugar supply.
PSMA’s statement said the industry had long warned that portal closures would reduce sugar supply and had warned the government that such closures would lead to price hikes. However, the government continued to pressure the mills to sell unnecessary imported sugar.
The association added that the majority of the public did not prefer imported sugar. In Sindh, portals were kept closed so that imported sugar at the port could be sold first. Since these restrictions were introduced, the supply of sugar has started to decrease.
Read: Wholesalers call sugar price rise an ‘artificial crisis’
These measures caused sugar prices to rise, for which the sugar industry is not responsible. In Punjab, district administrations forced mills to sell sugar to state-appointed dealers, who then sold it at higher prices in the market for their own profit, the statement added.
The statement concluded that the arrival of new sugar on the market is expected to stabilize prices. It called on the government to lift the unconstitutional and illegal restrictions on inter-provincial sugar transport.
Wholesale Grocers Association chairman Rauf Ibrahim told The Express Pakinomist that the crisis has been “systematically developed” as only 10% of the sugar mills have started crushing while the remaining 90% are yet to start operations despite the season being in full swing.
According to Ibrahim, ex-factory price in Karachi has increased from Rs175 to Rs185 per kg, wholesale price has reached Rs187 and retail prices have crossed the Rs200 mark. In Punjab and KP, sugar is sold anywhere between Rs200 and Rs210/kg.
Read more: Portal closure, import policy blamed for sugar price rise
Repeated warnings
A special meeting of the Sugar Advisory Board 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, imported sugar stocks and the closure of the S-Track portal.
In a statement in October, the PSMA had said that the government’s policy of prioritizing the sale of imported sugar and closing Federal Board of Revenue (FBR) portals for local sugar sales has triggered the recent price hike and lack of supply in the market.
Read also: Sugar industry confirms stable supply, rules out shortage
They informed the meeting that the industry had repeatedly warned the government against importing unnecessary sugar, but about 300,000 tonnes were still being imported. Now the government is struggling to relieve imported sugar and as a result the sales portals for local sugar have been blocked.
The industry also told the minister that PSMA had been warning the authorities for weeks through letters and press releases that keeping the portals closed would lead to shortages and price increases. However, these warnings were ignored. Representatives had emphasized that the domestic sugar industry was not responsible for the price hike and that traders and profiteers were the main beneficiaries.
