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August 23, 2020

Unbelievable history of sugar, rice, gold price spiral since 1947

Lahore

August 23, 2020

LAHORE : Although most macro and micro economics experts around the world ring alarm bells whenever any economy is witnessing a double-digit annual inflation, a statistical overview of the unbelievable history of the skyrocketing prices of sugar, rice and gold in Pakistan on year-to-year basis since its inception in August 1947 should leave many wizards of the subject absolutely mum and flabbergasted.

So, let us start with the steep hike in the per kilogramme sugar tariff during the last 73 years.

A strenuous archival research conducted by the Jang Group and Geo Television Network reveals that in 1947, or at the time of Independence, there were only two sugar mills in Pakistan; one in Punjab, the other in NWFP now Khyber Pakhtunkhwa. The area under sugarcane cultivation at that time was estimated at 200,000 hectares. Today in 2020, sugarcane is grown on an area of more or less one million hectares in the country. Punjab shares 62 percent of this area, while Sindh and Khyber Pakhtunkhwa share 26 percent and 16 percent of the total area under sugarcane cultivation respectively.

The monthly sugar consumption in Pakistan is almost 433 million kilogrammes. The sugar price in the Pakistani retail market has crossed Rs100/kg mark, which thus means that tariff of this vital daily-use kitchen commodity has surge by 16,567 percent since 1947 when its price was resting at 60 paisa per kg.

These figures hence signify a whopping average annual increase of 226.945 percent in per kg sugar tariff since 1947!

The sugar price in the retail market had reached Rs73.26 per kg in November 2019 as compared to Rs55.99 per kg in December 2018 - an increase of Rs17. 27 per kg.

Research shows that between 1947 and 1951, during the reign of country’s first prime minister Nawabzada Liaquat Ali Khan, the sugar price in retail market was just 60 paisa per kg.

Between 1952 and 1957, during Khawaja Nazimuddin’s regime, this price went up to 75 paisa per kg. During the 1958-1961, when Gen Ayub Khan was calling the shots, sugar price had increased to Rs1.75 per kg. During the 1971-1977 when Zulfikar Ali Bhutto was in power, sugar price was resting at Rs6 per kg.

Sugar price had soared to Rs9 per kg during Gen Zia’s tenure lasting between 1977 and 1988, it had touched Rs10 per kg mark during Benazir Bhutto’s rule between 1988 and 1991, sugar price was Rs13 per kg during Nawaz Sharif’s first tenure between 1991 and 1994, it was resting at Rs21 per kg during Benazir’s second stint in power between 1994 and 1997, it remained static at Rs21 per kg during Nawaz Sharif’s second tenure between 1997 and 1999, surging to Rs30 per kg during the Gen Musharraf-led regime between 1999 and 2008, it was Rs75 per kg in October 2010, soaring to the highest-ever level of Rs101/kg in November 2010, it was Rs59/kg in March 2012, it was Rs53 per kg when Nawaz Sharif’s third stint in power had commenced in 2013, it was Rs55 per kg in December 2018 and it is well over Rs100 per kg currently.

While gold per tola or 11.66 gms price had stood at Rs57 in 1947. And now in August 2020, per tola price of gold is resting at Rs122,800, which signifies 215,338 percent increase. The per tola gold price has thus recorded an average annual increase of 2,950 percent since 1947.

Here follows the history of per tola gold prices with respective years under review in brackets: Rs85 (1952), Rs91 (1953), Rs97 (1954), Rs103 (1955), Rs107 (1956), Rs111 (1957), Rs114 (1958), Rs133 (1959), Rs131 (1960), Rs135 (1961 and 1962), Rs 124 (1963), Rs123 (1965), Rs134 (1966), Rs138 (1968), Rs176 (1969), Rs177 (1971), Rs246 (1972), Rs432 (1973), Rs714 (1975), Rs597 (1977), Rs714 (1978), Rs1,230 (1979), Rs2,250 (1980), Rs2,123 (1985), Rs2,478 (1986), Rs3,478 (1988), Rs 3,705 (1991), Rs5,500 (1996), Rs 6,150 (1998), Rs7,200 (2002), Rs10, 600 (2005), Rs23,500 (2008), Rs29,500 (2009), Rs38,500 (2010), Rs45,800 to Rs54,700 (2011), Rs47,000 to Rs50, 200 (2014), Rs56,200 (2017), Rs56,200 to Rs68,000 (2018), Rs70, 700 (2019) and Rs122,800 (August 2020). Now let us review the rice price spiral since 1947: Newspapers of the time show that per kg price of rice at the time of partition was 50 paisas or half a rupee 73 years ago.

Today, the average estimated price of Basmati rice in retail market is Rs123 per kg, which thus shows that per kg price of this daily-use food item has risen by 24,400 percent. These figures thus signify a startling average annual increase of 335 percent in per kg rice tariff since 1947.

The per kg price of Basmati rice in Pakistan was Rs72 in 2018, Rs64 in 2017, Rs74 in 2014. The long-grain rice fetches a higher price than non-Basmati rice in both wholesale and retail markets.

Pakistan’s Basmati exports had risen to 92,454 tonnes in May 2020, as compared to 81,902 tonnes in the same month of last year, earning revenues of over $2.2 billion. Pakistan is among the 10 largest exporters of rice in the world. It exports the grain to around 100 countries around the globe.

It is imperative to note that in 1947, beef was sold at half a rupee per kg, mutton was priced at Rs1.25 per kg, milk was available at 40 to 50 paisa per litre, wheat flour was priced at Rs4 to 5 per maund (40 kg), bread was worth at one anna (six paisas), and desi ghee was sold at Rs2.50 to 3 per kg.