Bitter twist to the sugary tale
The worsening sugar crisis in Pakistan has taken a bitter turn. In the recent few weeks, the price of one kilo of sugar has gone up from Rs. 26 to Rs. 45. Not only has there been a massive price hike, it has been found that some leading politicians, who also own sugar mills, were impeding the supply of sugar stocks to the market to multiply their profits. This nexus between the ruling party politicians and the sugar industry has created havoc for the general public. One thing is certain, we have made progress in one sector only — ‘price hikes’. The prices of daily use items such as sugar are touching the sky and the public is bewildered why our government machinery has failed to address this crisis.
Sugar worth $ 35 million was exported during the last three years. Exports cannot be made without the government’s permission. According to the Pakistan Sugar Mills Association (PSMA), a shortage of 1 million tonnes of sugar is likely in the current season. Therefore, this collaboration on the part of the government with the mill owners at a time when the country is facing a drastic sugar crisis puts a definite black mark on the government. If this was not bad enough, the government’s incompetence has added fuel to the fire. The government decided to import sugar at the worst possible time – when sugar prices in the international market were the highest. The commodity was not imported when the international prices were low, but only when the crisis in the country had gotten out of hand and the international rates had soared. Indian suppliers are reported to have revoked contracts booked by Pakistani importers in the past few weeks at $ 440-460 per tonne. As sugar merchants cashed in on the demand by selling it for high prices, the Indian sugar was sought to be imported to meet the crisis at home. Importers are now reportedly turning also to the European Union and Brazil. Those who are criticising the Trading Corporation of Pakistan (TCP) for having stocks of refined sugar of about 200,000 tonnes, should note that these are strategic reserves that cannot be released except in emergency situations like wars, etc.
It has also been proved that contrary to the millers’ claim that they are incurring losses due to the sudden rise in input costs, their accounts tell a different story. Except for a few of the 30 mills listed on the stock exchange, the rest are making healthy profits. The escalating price of sugar has benefited none else but the hoarders – who also happen to be the sugar-mill owners. They have already minted Rs 7 billion and are still drooling for more. Taking advantage of the high demand, the retailers have also started fleecing people. The sufferers are of course the vast majority of the 150 million people of Pakistan — the downtrodden and poverty-stricken. The millers are also exploiting the sugarcane growers by not paying them on time and creating other hassles for them. It is time that the government wakes up from its sluggish and incompetent attitude. The only way out of this quagmire is for the government to deal strictly with the culprits, no matter who they are, and come up with a clear, transparent sugar policy that brings down its cost to what the people can afford.
Sugar worth $ 35 million was exported during the last three years. Exports cannot be made without the government’s permission. According to the Pakistan Sugar Mills Association (PSMA), a shortage of 1 million tonnes of sugar is likely in the current season. Therefore, this collaboration on the part of the government with the mill owners at a time when the country is facing a drastic sugar crisis puts a definite black mark on the government. If this was not bad enough, the government’s incompetence has added fuel to the fire. The government decided to import sugar at the worst possible time – when sugar prices in the international market were the highest. The commodity was not imported when the international prices were low, but only when the crisis in the country had gotten out of hand and the international rates had soared. Indian suppliers are reported to have revoked contracts booked by Pakistani importers in the past few weeks at $ 440-460 per tonne. As sugar merchants cashed in on the demand by selling it for high prices, the Indian sugar was sought to be imported to meet the crisis at home. Importers are now reportedly turning also to the European Union and Brazil. Those who are criticising the Trading Corporation of Pakistan (TCP) for having stocks of refined sugar of about 200,000 tonnes, should note that these are strategic reserves that cannot be released except in emergency situations like wars, etc.
It has also been proved that contrary to the millers’ claim that they are incurring losses due to the sudden rise in input costs, their accounts tell a different story. Except for a few of the 30 mills listed on the stock exchange, the rest are making healthy profits. The escalating price of sugar has benefited none else but the hoarders – who also happen to be the sugar-mill owners. They have already minted Rs 7 billion and are still drooling for more. Taking advantage of the high demand, the retailers have also started fleecing people. The sufferers are of course the vast majority of the 150 million people of Pakistan — the downtrodden and poverty-stricken. The millers are also exploiting the sugarcane growers by not paying them on time and creating other hassles for them. It is time that the government wakes up from its sluggish and incompetent attitude. The only way out of this quagmire is for the government to deal strictly with the culprits, no matter who they are, and come up with a clear, transparent sugar policy that brings down its cost to what the people can afford.
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