Govt sets retail price for sugar to tackle soaring rates

LAHORE: The government, in response to the unprecedented 30 percent surge in retail sugar prices within a matter of weeks, has set the retail price of sweetner at Rs98.82/kg.

The move comes after the Sugar Advisory Board recommended the fixing of retail rates to check runaway prices. The price of sugar includes Sales Tax at Rs14.58 per kg, a profit margin of Rs5.30, and a distributor's margin of 25 paisa per kg. The transport cost is calculated at Rs2 per kg, and the retailer's profit is Re1 per kg.

A government notification said after reviewing the data provided by the provinces and information reported by other government agencies, the Controller General of Prices has set the maximum retail price of locally produced “white crystalline sugar at Rs98.82/kg, at which it shall be made available to the general public”. The ex-mill price maximum is Rs95.57/kg, inclusive of sales tax.

“The provincial authorities and the Islamabad Capital Territory have been directed to implement the order and take action against mills, dealers, distributors, and retailers who do not comply with the order.” “The delegated authorities of the Controller General of Prices in the provincial and federal jurisdictions shall file a weekly compliance report.”

Under the provisions of law, the government fixes the price of white sugar based on the recommendations of the Sugar Advisory Board. The board approved the sugar price calculated by the Ministry of National Food Security during its sixth meeting on April 17, 2023.

Despite the notification issued to the Pakistan Sugar Mills Association and all provinces to submit their views and comments by Thursday, April 20, 2023, the association sought more time, which is contrary to the larger public interest.

A number of sugar dealers have expressed their concerns about the aggressive approach taken by the government to fix the sugar prices, which may spread negative sentiments and panic in the market. “In the local market, no one would be able to sell sugar at this price, and wholesalers have already stopped further orders due to the prevailing circumstances,” a dealer said. The Federal Controller General of Price has directed the Provincial Controller General of Prices to implement the fixed price of sugar until the next sugarcane crushing season, or as modified earlier by the relevant authority. However, a week has passed, and the orders have been disregarded throughout the country. The Provincial Controller General of Prices and the ICT Administration have failed to enforce the maximum price for sugar set by the federal government. Sugar is being sold at Rs125 to Rs135 per kilogram across the country, while some departmental stores are even selling it for Rs150 per kilogram or more, with varying packaging.