LAHORE - With the holy month of Ramazan approaching, the sugar price has started adopting upward trend while the mafia has also started the blame game, as the millers say the stockists have started to hoard the white sweetener while the dealers are of the view that soon after the government allowed export, price of the highly consumed item in domestic market jumped by Rs7 per kilogram.
They said that following the federal budget announcement, the price of sugar witnessed an increase of Rs2.50 to Rs3 per kg in wholesale market reaching Rs54 per kg as compared to Rs51 per kg earlier.
A sugar miller was of the view that stockists are now active and buying maximum stock with a view to hoard the commodity ahead of Ramazan which falls in July. He said that due to lack of buying last month, sugar price in wholesale market was falling.
However, the Pakistan Sugar Dealers Association chairman Asghar Butt stated that the opening of tender of 200,000 tons by the Trading Corporation of Pakistan (TCP) has caused fluctuation in prices.
Retailers are already charging Rs55 per kg. However, they said that they have not increased the prices yet but will see the wholesale market rate after opening of TCP tender.
He said that sugar exports have also picked up and from March 2012 to April 2012 export stood at 23,776 tons worth $14.8 million. There was no sugar export in July-April 2010-2011, he added.
On the other hand sugar millers linked the jump in price to pre-Ramazan activities, saying that exports are picking up at a snails pace owing to paper work with the banks. They said that India was already in the world market. When millers asked the government to allow sugar exports, the price in world market was $700-800 per ton (FOB) while now it hovers between $500-520 per ton. They said the country produced 15 per cent more sugar to 4,485,592 tons in July-March 2011-2012 as compared to 3,892,141 tons in the same period of last fiscal year, but government delayed the export.
Dealers said that sugar, which was available at the wholesale price of Rs48/kg in January 2012, has now increased to Rs54, recording an increase of Rs6/kg, while the commodity at retail outlets is now available at Rs55-57/kg. As the powerful sugar millers, both in government and opposition parties have successfully forced the concerned authorities to allow export of the commodity, the price of sugar at wholesale and retail market has started going up since January this year.
According to them, the commodity available here in wholesale market at Rs45 to Rs48/kg during January and February, jumped to Rs50/kg by March 1. However, price of the commodity was suddenly increased by Rs4/kg now, pushing the wholesale rate of sugar to Rs54/kg.
They said that the price of the kitchen item has started increasing as a result of the government’s recent move of relaxing a ban on sugar export. It has allowed the private sector to export sugar, a move aimed at stabilising prices in the local market and resolving cash flow problems of mills. The government had banned sugar export in 2009.
Besides, the government was already purchasing tonnes of sugar from the local millers to arrest the price fall after they complained that they were suffering from huge losses. However, further export, cartelisation and price manipulation of millers would also cause more increase in the rate of the commodity in local market in Ramazan.