Govt caps retail sugar price at Rs164 per kg

ISLAMABAD: The government and sugar sector on Wednesday struck an agreement, capping sweetener’s ex-mill and retail prices at Rs154-159 and Rs164 per kg, respectively for one month. However, a kilo of sugar at 274 fair-price shops countrywide will cost Rs130 per kg. Deputy Prime Minister Ishaq Dar announced this after holding talks with the Pakistan Sugar Mills Association (PSMA) here.

The annual general meeting (AGM) of the sugar sector was held on Tuesday in which assent to fix the retail and ex-mill prices was granted for one month. “The retail stage price is fixed at Rs164 per kg,” said Dar adding that the ex-mill price was worked out in the band of Rs154 to Rs159 per kg.

Earlier, the government had rejected the PSMA’s demand to fix the ex-mill price at Rs175 per kilogram and made it clear that any efforts to exploit the market would be dealt with an iron hand. The sugar barons were planning to increase the price to Rs200 to Rs220 per kg in the domestic market a few weeks ago. The government in consultation with relevant quarters assessed that the cost of production, including the sales tax, stood at less than Rs154 per kg.

On the other hand, the millers told the ministers that their cost was hovering at more than Rs175 to 180 per kg. The average sugarcane cost stood at Rs450 per 40 kg (maund) in the current season, which translates to Rs1,125 to Rs1,150 per 100 kg of sugarcane. After incorporating the other manufacturing costs, the net cost of sugar production on 100 kg stands at Rs1,185. The recovery ratio on average is estimated at 9 to 10 percent. The per kilo cost of the sweetener is estimated at Rs118-120 per kg. Even after incorporating other administrative expenses and calculating profits the cost of sugar is calculated at Rs130 per kg. With the imposition of 18 percent GST, the ex-mill price of sugar stands at Rs154 per kg. Against this, Dar said the sale of sugar at Rs178-180 per kg was not tolerable, it was not acceptable to the prime minister.

A sub-committee headed by Minister for National Food Security and Research Rana Tanveer Hussain would submit its feedback within one month prior to April 19 in this regard, he said. He said the sugar millers had explained their reasons and they held a detailed interaction over the issue. Dar reiterated that the government was committed to concluding the issue by making the commodity available at a reasonable price.

He further explained that with collective consultations, if the two-tier system could be implemented, the common man would get sugar at even the lowest price as announced. He also thanked the sugar millers for the provision of sugar at the subsidised rate of Rs130 per kg at all 274 Sasta Bazaars.