Sugar millers have ignored Supreme Court's (SC) directive regarding the sale of locally produced white refined sugar at the prices fixed by the Lahore High Court, and have unanimously decided to block supply of the commodity to the wholesale market till the apex court reaches any decision.
Even after the announcement of the superior court, the commodity is being sold at Rs 48/kg in retail markets of Punjab, Rs 60/kg in Sindh, Rs 63/kg in Balochistan, and Rs 60-63/kg in some parts of the NWFP. The sugar crisis was likely to aggravate before Eid-ul-Fitr due to suspension of supply and gap between demand and supply of the commodity to wholesale market, sources told Business Recorder on Thursday.
They said it was not possible for millers to sell refined sugar at ex-mill price of Rs 36/kg as the cost of production on one kilogram processed commodity stood at Rs 38. "The millers had purchased sugarcane at Rs 145 per 40/kg from growers due to decline in crop during 2008-09 crushing season against official price of Rs 80 and Rs 81 per maund and paid Rs 2.31/kg General Sales Tax (GST) and 45 paisa Federal Excise Duty (FED) to the government, so how it is possible to reduce ex-mill price," they added.
They said sugar mill owners had accepted the orders of Prime Minister Yousuf Raza Gilani and fixed the ex-mill rate of the commodity at Rs 45/kg, but it was not possible to reduce sugar price to Rs 36/kg. "On August 31, the sugar stock including that of the Trading Corporation of Pakistan (TCP) stood at 1.14 million tons, which is enough to cater to the needs till December 2009," they added.
They said, due to suspension in supply of sugar from mills, an artificial shortage of the commodity had been created in wholesale markets, which would lead to price hike. "The two provinces Balochistan and the NWFP are already facing sugar crisis due to ban imposed by the Punjab government on the movement of the commodity," the sources told.
It may be mentioned here that a three-member bench of the apex court comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Sardar Muhammad Raza Khan and Justice Nasirul Mulk had warned PSMA of the contempt of court proceedings if its members failed to comply with Lahore High Court (LHC) order regarding sugar price till the apex court reaches any decision, and postponed the hearing till September 24.
Talking to Business Recorder, PSMA Chairman, Iskandar Khan, said the millers moved the Supreme Court with a hope that the superior court would address the issues faced by local industry after LHC verdict of fixing retail sugar price at Rs 40/kg. PSMA would try its best to convince the apex court by producing facts regarding sugar prices, he added.