A sugar crisis in country has wrong-footed the political leadership as mills owned by lawmakers are blamed for compounding the miseries of people and housewives struggle to sweeten the Eid festival. Depeleted crops, international prices at 30-year highs and hoarding are variously blamed for country's latest commodity price hike, forcing the federal government to eye costly imports to stabilise prices.
Pakistan is Asia's third-largest user of sugar and the world's fifth largest producer of sugar cane, according to the Pakistan Sugar Mills Association. Despite this production, Finance Minister Shaukat Tarin told AFP imports were now needed. "We'll import 300,000 tons of raw sugar and 75,000 tons of refined sugar to stabilise domestic prices," he said.
A kilo of sugar cost 25 rupees (three US cents) at the start of 2009 and now costs more than 50 rupees, said independent economic analyst A.B. Shahid.
Estimates show a 23 percent decline in sugar crop production. While last year country produced 4.7 million tons, farmers are on track to produce 3.2 million tons this year. That means a severe shortfall as annual national consumption is 4.2 million tons.
Low rainfall has exacerbated the shortage but manufacturers have been blamed for fuelling the problem. "Sugar mill owners created an artificial shortage crisis. This is a clear case of total loss of government control over the market," said Shahid.
Some of the country's 80 mills are owned by influential lawmakers affiliated both to the government and the opposition, injecting politics into sugar as into almost everything else in country. "There are interest groups on our political landscape who... shelter each other in public because they have common vested interests," said Shahid.
"Such food crisis shortages will escalate further because we have a useless government, which does not know what to do. No trade body takes action against the black marketeers and hoarders and we see total anarchy," he said.
The International Sugar Organisation (ISO) says world-wide sugar supplies are expected to fall nine million tonnes short of demand in 2008-09. In south Asia, sugar has major social and political implications. It is a key part of the diet and an essential ingredient for delicacies at religious festivals, of which Eid-ul-Fitr is coming up in country and Diwali in India.
"My husband is a labourer and the only breadwinner in the family, which is why we have reduced consumption of sugar and meat despite Ramazan because we simply can't afford it," said a housewife Samina Fateh. She lives in the poor neighbourhood of Liauatabad in country's teeming financial capital of 14 million people sprawled on the Arabian Sea. "With the same money we buy half the amount of sugar as a couple of months ago. We used to eat meat and fish twice a month, now once a month," said Fateh.
The benchmark has seen sugar futures at the New York-based Intercontinental Exchange rise five percent to 22 cents a pound for October delivery, the highest since March 30, 1981. The federal government is offering a one-billion-rupee (12-million-dollar) subsidy on essential food items through a chain of state-run utility stores across the country.
"Mill owners hoarded sugar and themselves increased prices thinking the government will ultimately import," said Rana Sanaullah, law minister in Punjab, one of country's sugar-producing provinces. "There is a lack of consumer protection bodies in the country, which is the main reason that our people suffer," he added.
But mill owners take a different line, accusing the cash-strapped government of agreeing to imports too late. "The government is responsible for the sugar crisis," said Humayun Akhtar Khan, a leader in the opposition Muslim League-Q party whose family owns a sugar mill partly held responsible by some ministers.
Neighbouring rival India is also reeling from a poor sugar crop, forcing it to import from ultra-expensive international markets. The country is estimated to have only 4.5 million tonnes of sugar stock left, which would meet demand for just two months.
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