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Friday March 29, 2024

Sugar price raised by Rs5 despite downward trend in world market

By Mehtab Haider
February 12, 2016

ISLAMABAD: In order to pocket billions of rupees windfall profits, the sugar tycoons have increased the price of sweetener by Rs5 per kg in the domestic market despite downward trends in international market and sufficient availability that even irked Minister for Commerce Khurram Dastgir Khan.

From all sides, the sugar barons are making massive profits as the government allowed 0.5 million tons exports with provision of subsidy of Rs13 per kg. “Now the sugar tycoons are playing tricks as they increased domestic prices from Rs57.2 per kg to Rs62.7 per kg in domestic market in last one and half month period without any justification in order to earn profits without even exporting the commodity,” official sources told The News here on Thursday.

The sugar exporters have made contracts of 150,000 tons of sugar with different countries and so far they have exported just over 21,000 tons sugar mainly to Afghanistan, Malaysia and Saudi Arabia. The government had so far taken lenient view by not taking any stern action in this regard.

However, the Ministry of Commerce on Thursday stated in a statement that an inter-ministerial committee headed by Minister for Commerce Khurram Dastgir Khan expressed concern over unwarranted increase in prices of sugar in the domestic market despite a downward trend in international sugar prices and availability of sufficient domestic stocks.

Speaking at the occasion, the minister stated that while formulating pro-export policies, the government would safeguard the interests of all stakeholders especially the consumers and farmers. 

The Economic Coordination Committee of the cabinet while allowing export of 500,000 tonnes surplus stock of sugar had tasked an inter-ministerial committee on sugar constituted by the prime minister to review every month the sugar stock/export situation.

The second monthly meeting of the committee was held with the commerce minister in the chair. Secretary commerce, secretary industries and production, additional secretary finance and representative of Ministry of National Food Security and Research attended the meeting.

The meeting was informed that 21,133 MT of sugar has been exported since the ECC extended permission to export sugar in December last year.

Secretary industries informed that a stock of 2.25 million metric tons of sugar is currently available in the country and the crushing season will continue till mid-April further adding to the available domestic stock. Therefore, there was abundant stock of sugar available in the country whereas monthly consumption is 0.4 million metric tonnes.

The inter-ministerial committee in its first meeting held in January had decided to recommend discontinuation of sugar export if the prices in domestic market increased by more than 10 percent. The committee in its second meeting was informed that the retail price of sugar in domestic market has increased from Rs57.20 per kg on 10th December, 2015 to Rs62.07 per kg. As the price increase is less than 10 percent, the threshold to discontinue the permission for export has not yet been crossed. However, as there are sufficient surplus stocks in the country and international sugar prices are declining, the current price increase was inexplicable. With more production of sugar coming in the channel, prices should go back to the previous levels during the coming days.

The minister tasked the committee to carefully monitor the domestic prices and stock position of sugar to avoid any speculation and abnormal changes in the market, particularly in the run-up to and during Ramazan.