Sugar mafia is again in action to jack prices through short supply to exploit the market ahead of holy month of Ramzan. Sources said industrialists, whole-sale dealers and middlemen's representatives met in Lahore on August 15 to workout a strategy for slowing down supply to the market and create an impression of shortage to give big rise to sugar prices in the next few days.
It decided to dictate the market by holding back major portion of available stocks to push up prices on daily basis and make irrationally higher profit. The mafia will continuously monitor the release of stocks from mills and ensure that no mill sell more than the specified quantity.
The mafia would repeat its last year's history, when it had held a meeting in Lahore on December 26, to decide sugar rates on daily basis and make undue profit through various cheap tactics.
The mafia managed to raise rates by Rs6-7 per kg from December 26, 2005 to January 1, 2006. This took sugar prices from Rs22 to Rs28-29 per kg in a fortnight. This trend continued and by the first week of February sugar prices were as high as Rs44 per kg at retail level.
The government made announcement after announcement to ensure buyers that they would soon get sugar at reduced rates but these remained mere announcements. Even new stocks could not bring any relief to buyers as prices remained abnormally higher from January to May this year. Imports in June and July last brought down sugar rates, but relief for buyers was not significant. Even today sugar is being sold at Rs38 and Rs39 a kg at retail level.
The new move indicates that the last year's exploitation inspired the mafia to hit back again to make more money through profiteering.
Sources said the mafia would again apply same tactics of slowing down the supply and creating artificial shortage in the market to take prices to new height.
The question arises: will the government move against the mafia or will it simply remain as mere spectator to allow profiteers make money at will?
Sugar stocks available with the Trading Corporation of Pakistan (TCP) can make a real difference. But the time for the release of stocks will be the essence. It may be noted the TCP has around 0.8 million tons of sugar in its stocks. The release of TCP stocks can dictate the market to ensure the availability at reasonable rates during the holy month of Ramzan and afterwards.
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