PSMA cites closure of FBR portals and restrictions imposed by the state 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 restrictions imposed by the government on traders, including bans on inter-provincial transportation.
The Wholesale Traders Association had earlier accused sugar mills of driving up prices. They had termed the current rise in sugar price as an “artificial crisis”, alleging that despite a bumper sugarcane crop and imports, there has been a deliberate delay in the supply of sugar.
The PSMA statement said the industry had long warned that portal closures would reduce sugar supplies and had alerted the government that such closures would lead to price increases. However, the government continued to pressure 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 imposed, the supply of sugar has begun to decline.
Read: Wholesalers describe the increase in sugar prices as an “artificial crisis”
These measures caused an increase 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 statement concluded that the arrival of new sugar on the market is expected to stabilize prices. He called on the government to lift the unconstitutional and illegal restrictions on inter-provincial transportation of sugar.
Wholesale Traders Association president Rauf Ibrahim told The Express PAkGazette that the crisis has been “systematically engineered” 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, the ex-factory price in Karachi has increased from Rs 175 to Rs 185 per kg, the wholesale price has reached Rs 187 and retail prices have crossed the Rs 200 mark. In Punjab and KP, sugar is sold between Rs 200 and Rs 210/kg.
Read more: Portal closure and import policy blamed for sugar price rise
Repeated warnings
A special meeting of the Sugar Advisory Board, under the co-chairmanship of Deputy Prime Minister Ishaq Dar and Federal Minister for National Food Security Rana Tanveer Hussain, was held in October to review the sugar market situation, stocks of imported sugar and closure of the S-Track portal.
In a statement in October, 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 has triggered the recent price rise and supply shortage in the market.
Also read: Sugar industry confirms stable supply and rules out shortages
They informed the meeting that the industry had repeatedly warned the government against unnecessary importation of sugar, but around 300,000 tonnes were still being imported. Now, the government is struggling to get rid of imported sugar and as a result, local sugar sales portals have been blocked.
The industry also told the minister that the PSMA had been warning authorities for weeks through letters and press releases that keeping portals closed would lead to shortages and price increases. However, these warnings were ignored. The representatives had stressed that the domestic sugar industry was not responsible for the price increase and that traders and speculators were the main beneficiaries.
