Food dept vows to implement Rs80 per kg ex-mill sugar price

LAHORE:The Punjab Food Department has vowed to implement Rs80 per kg ex-mill sugar price notified by the provincial government under the provision of law.

Muhammad Zaman Wattoo, Cane Commissioner Punjab, said on Sunday that the provincial government had every right to implement the newly set sugar rate through the law. He observed that it would a total injustice if sugar mills did not supply sugar at the officially-fixed price.

Is the retail price of sugar at Rs85 per kg less as being termed by the sugar mills owners, he questioned. Throwing light on various factors involving the pricing of sugar, Wattoo said the formula for determining the production cost of sugar, which determines the ex-mill and market price, was a bit complicated. Taking advantage of it and using vague stats, propaganda is being spread that the retail price of sugar at Rs85 per kg is very low and the sugar mills will suffer losses, said Zaman Watto. To make it easier to understand the current price of sugar, the Punjab Food Department senior officers shared an analysis about sugar price trend and associated facts about its rates. In 2018, he explained, the price of sugarcane was Rs180 per 40 kg. The sugar mill owners also claim that they bought sugarcane at this price this year. In 2018, the market rate of sugar averaged at Rs52 per kg. Contrary to this, the average purchase price of sugarcane in Punjab in current year (2020-21) was Rs259 per 40 kg, according to the sugar mills' own signed reports. Thus, increase in sugarcane price was 43.89 per cent as compared to the price in 2017-18. If the then sugar price of Rs 52 per kg is increased by 43.89 per cent, its per kg price becomes Rs74.82. He also recalled that the sales tax on sugar was increased from 8 per cent to 17 per cent in 2019. Hence, if 9 per cent increase is added, the total retail price became only Rs81.56 which was again much less than the recently-fixed market price of Rs85 per kg.