An increase in sugar prices right after the holy month of Ramadan has raised eyebrows in sugar market, blaming the investors for hoarding sugar in connivance with selective sugar millers. The market sources said the investors' mafia has built up sugar stocks worth 255,000 metric tons amounting to Rs 15.91 billion at five different mills in the province of Punjab and Sindh.
"These investors have planned to increase sugar price Rs 25 per kilogram in next three months," they added. But still the sugar price has surged by Rs 7 per kilogram over the last one week because of the manipulation of investors, who are hand in glove with the sugar millers.
They said a Hindu sugar miller, a bureaucrat and another affluent sugar miller, all based in Sindh, are buying heavy stocks at various sugar mills and avoiding its lifting to artificially increase sugar prices in the open market. The sugar millers, on the other hand, have termed all such allegations as baseless, saying that sugar prices register an upsurge traditionally at the end of Ramadan.
"We are entering to next crushing season with surplus stocks and 25 percent extra crop of sugarcane comparing with the previous year," said Muhammad Rafique, group director finance of Jamal Din Wali Sugar Mill. He said it is a normal course of business that the investors keep their stocks with mills after paying the price. "They keep lifting stocks as per the market situation, therefore, terming it a conspiracy for price escalation is meaningless," he added.
He said it is highly unfortunate that the government intervenes in fixing price of sugarcane while the end product (sugar) is left to mechanism of open market. "The government has failed to provide level playing field, resulting into closing down of 50 percent of sugar mills in central Punjab. He said total stocks with the JDW are less than 100,000 metric tons out of which some 30,000 metric tons belong to investors. The position of sugar stocks as of 15 July 2016 is as follows: 1.4 million tons in Punjab, 0.7 million tons in Sindh, 0.15 million tons in Khyber Pakhtunka, totalling around 2.25 million tons throughout the country. A monthly comparison of sugar consumption suggests that Pakistan will be left with sufficient stocks at the start of next crushing season.
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