Sugar prices have shot up incredibly in the market during last 10 days or so, as a result of defective policy of the Trading Corporation of Pakistan (TCP), according to market analysts here. The commodity, which was available at Rs 36 per kg until a few days ago, has skyrocketed as a result of TCP's policy whereby it has bought over 300,000 tons in the past few months to keep the price of sugar much above international level, they said.
Whereas prices of most commodities world-wide are coming down, ie edible oil, plastic and sugar, the prices of sugar continue to climb in Pakistan, much to the discomfiture of the common man. The price of sugar was around Rs 35 per kg until about three months ago, but aggressive purchases by TCP pushed the price to Rs 40 per kg, a steep increase of Rs 5 per kg recently.
The price of sugar in international market is 12.5 cents per pound, which comes to Rs 22 per kg. Even with 17 percent sales tax, it should not be more than Rs 26 per kg. If the TCP feels the need to stockpile sugar in huge quantity, it could import at a much cheaper rate than to pay such high rates to sugar mills, analysts say. "Why is TCP paying such high rates to sugar mills in Pakistan, thereby adding to their already high profits and causing hardship to the people of Pakistan.
Don't we have enough inflation in Pakistan that TCP is further adding to it? they ask. There is no government policy to keep sugar prices high, and ECC has not published any decisions requiring TCP to buy and stockpile sugar.
According to these analysts, the result of this buying spree by TCP would mean that it would have to export Pakistani sugar at low prices later this year, thus incurring huge losses. It was high time that TCP should have sold some of its high sugar stocks in Pakistan right now, thus giving some relief to the people and also avoiding future losses.