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January 22, 2020

‘Smuggling, speculators pushing up sugar prices’

Business

January 22, 2020

KARACHI: Sugar prices have been rising sharply in recent weeks as hundreds of tons of the sweetener are being smuggled out of the country through the porous borders into Afghanistan, traders said on Tuesday.

They said sugar prices have jumped to Rs80/kilo at retail shops in Karachi. Traders said hoarders and other speculators were also pushing up sugar prices and hurting consumers.

Farid Qureshi, general secretary, Karachi Retail Grocers Association said sugar prices were raised by Rs6/kilogram to touch Rs76/kg in the wholesale market on Monday, “which resulted in retail price increase to Rs78-Rs80 in some markets”.

“Mills also increased the price by Rs6/kg,” Qureshi said. He, however claimed that “there is no shortage of sugar in the local market and price increased as a result of sugar exports to Afghanistan, where demand is high”.

Industry officials said the wholesale rate of sugar is expected to reach Rs80/kilo next week. Rising food prices, particularly for sugar and wheat flour, present one of the toughest challenges for the PTI’s 17-month-old government. It, on Monday, allowed duty-free import of 300,000 tons of wheat to ease a runaway price.

Karachi Wholesale Grocers Association (KWGA) has also demanded to stop delivery from borders and expressed concern over fears of “a potential sugar crisis”.

Industry officials said government is aware of the looming sugar crisis which is fuelling public anger. The government has tried to deflect criticism and boost supplies by cracking down on hoarders.

Anis Majeed and Malik Zulfiqar Ali of KWGA, in a joint statement, suggested stopping sugar deliveries outside the country, especially to Afghanistan.

KWGA officials said sugar production would likely be fall by 1.5 million tons this year. Moreover, expected sugar consumption would be anywhere between and 5.0 and 5.5 million tons in the country.

Experts have also warned that delays in cane payments and reduced expectations surrounding support pricing were prompting some farmers to switch to other crops such as cotton and corn, which has an impact on overall sugar production in the long-term.

Last year, Pakistan produced 5 to 5.5million tons of refined sugar, sufficient for local demand. They also urged the government to take measures to prevent a potential sugar crisis, and further adopt effective strategies before the sugarcane crop is harvested this season.