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Sugar issues

By Editorial Board
September 15, 2021

The sugar crisis in the country seems to have lingered on for too long. Now the Trading Corporation of Pakistan (TCP) has issued a new international tender to purchase 200,000 tons of sugar from the international market. The TCP has issued a series of purchase tenders in past months to improve local supplies. Last month also the TCP purchased a consignment of 200,000 tons. It is a matter of concern that the country which used to be an exporter of sugar has been facing one crisis of sugar after another for the past three years. Notwithstanding what the government has been claiming, the fact remains that in 2013 the price of sugar was Rs54 a kg which came down to Rs52 a kg in May 2018, just before the PML-N government completed its term. The prices for sugar have been fluctuating regularly and the government has been unable to handle the situation for the benefit of common consumers.

The problem is not intractable if some right policies are developed and implemented. The main issue is the government’s reluctance to take head on the sugar mill owners who have reaped hundreds of billions of rupees in undue profit by manipulating the market. This manipulation works at various levels. First, they force the sugarcane growers to sell their produce at throwaway prices. Then the same sugar-mill owners – many of whom belong to the ruling party – ask for subsidies from the government. The government has doled out billions in such subsidies which have not benefited the consumers. At the third level an artificial crisis is generated when the sugar is not available in the market and consumers spend hours in queues to buy just a couple of kg of the commodity even from Utility Stores. When production falls below consumption level the government rushes to purchase from the international market.

Now sugar is being sold at an exorbitant rate touching Rs115 a kg, whereas just last year the court had fixed the retail price of sugar at Rs85 a kg. For only a couple of days the sugar was available at that price; and since then it has hovered between Rs100 and Rs115 a kg. The new tender seeks rapid delivery with shipment of the first 25,000 tons to be undertaken within two weeks plus voyage time after opening of a letter of credit on the contract. If that does not happen in time, there may be another sugar crisis in the offing and prices may touch as high as Rs150 a kg. This is all disturbing news and the government needs to set its house in order. The top managers in this matter have been issuing conflicting claims and promises but the people of the country have their families to feed; and sugar is an essential commodity. This sugar issue must be tackled on a priority basis and the government must make sure that sugar is available at the price of no more than Rs85 a kg, which will still be more than it was in 2018.