Millers say there's no sugar crisis

Sugar millers have brushed aside the reports of a brewing sugar crisis in the country, saying that country will be producing some 5.6 million tons of sweetener this year against its total annual consumption of 5.2 million tons.

"The recent rise in sugar prices has nothing to do with shortage of Sugar in the country," said Sikander Khan, former chairman Pakistan Sugar Mills Association (PSMA). He linked the soaring prices to increase in sales tax on the commodity from 8 percent to 17 percent during this financial year.

"This year government has ensured that farmers must be paid as per support price of sugarcane of Rs 190/40kg that has led to an increase in prices of refined commodity," he said, adding that in previous year farmers were not paid in accordance with announced support prices.

"We procured sugarcane from farmers at the rate of Rs 120 to 140 per 40 kg last year but now it has been increased to Rs 220/ 40 kg," he added.

He calculated today's ex-factory rate of sugar production at Rs 74 per kilogram inclusive of sales tax, which increased from Rs 5 to Rs 10 in the 2019-20 budget. With addition of brokers' commission, wholesalers' as well as retailers' margins, freight and other expenses, the price of sugar comes to around Rs 80 per 1kg.

Meanwhile, the traders said sugar prices have been rising sharply in recent weeks as hundreds of tons of sugar is being smuggled out of the country into Afghanistan,

They said sugar prices have jumped to Rs 80/kilo at retail shops in Karachi. Traders said hoarders and speculators were also pushing up sugar prices and hurting consumers.