PM Imran Khan felicitates his team: Sugar price down from Rs102 to Rs81/kg in a month

LAHORE: Prime Minister Imran Khan Saturday greeted his team for bringing sugar price down from Rs102/kg to Rs81/kg through a multi-pronged strategy.

He tweeted, “MashaAllah sugar is selling at a national average of Rs81 per kg vs. Rs102 per kg a month back.

“I want to congratulate my team for bringing the sugar price down through a multi-pronged strategy.”

In the past month, despite prime minister’s wish to control prices of wheat, wheat flour and sugar, the rates had remained high this year.

In the case of wheat and wheat flour, the Pakistan Bureau of Statistics (PBS) reported a reduction in prices on a monthly basis, but the rates remained higher on a yearly basis. The federal government’s decision to import and export wheat and sugar had a direct bearing on the prices in the domestic market.

The PBS reported that wheat prices increased 36.6% in November over the same month a year ago in urban areas and 37.9% in rural areas. Prices of wheat flour rose 19.6% in rural areas.

Also, sugar prices increased 35.8% in November in cities and 42.5% in villages over a year ago, according to the national data collecting agency.

In the meanwhile, due to very high sugar price, powerful sugar manufacturers deprived consumers of billions of rupees in the first month into the current crushing season.

On the basis of Rs200-215 per 40kg price of sugarcane, the ex-mill rate of sugar should have been around Rs55-60 per kg. However, with opening ex-mill price of Rs95 plus per kg in early November, the average ex-mill price in the ensuing month stood at over Rs80 per kg, which was at least Rs20 per kg more if compared with sugarcane price parity.

The ex-factory sugar price was hovering around just Rs65 per kg in November-December 2019 despite sugarcane procurement price of Rs250 per 40 kg.

According to an analysis, carried out by The News, the sugar price should have been much lower than Rs81 per kg, over which the premier expressed his joy on Saturday. Since the first week of November this year when the crushing started in the country, the average ex-mill price of sugar stood at around Rs80 per kg. With the countrywide monthly consumption calculated at 450,000 tons, influential sugar mill owners deprived consumers of nearly Rs10 billion on the basis of around Rs55-60 per kg all-inclusive production cost.

Even at the present ex-mill price of Rs70 per kg, the sugar mill owners continue to make hefty profit of Rs10-15 per kg.

Punjab Industries Minister Mian Aslam Iqbal said that price fixation at manufacturing stage was a prerogative of the Centre, as per decision taken by the federal government.

Federal Minister for Industries & Production Hammad Azhar, who was tasked to check ex-mill sugar price, did nothing for curbing inflated opening rate, fixed by the sugar mill owners. Despite several attempts, he did not respond to the queries sent to him by the correspondent about failure of his ministry to regulate the sugar prices.

However, he did clarify the issue at microblogging site. “The ex-mill and retail rates of sugar are down by approximately Rs30/kg in the last one month. Competitive sugar import by the government, its supply at controlled rates and timely start of the crushing season provided relief to both consumers and farmers,” he tweeted on Saturday.

When contacted, Chaudhry Muhammad Waheed, executive member of Pakistan Sugar Mills Association (PSMA), said ex-factory price of sugar had come down to Rs70-72 in the market. The opening ex-mill price of sugar was high due to low sucrose recovery of about 7% at the start of season and Rs230 per maund rate of sugarcane, he claimed.