LAHORE: Pakistan Sugar Mills Association (Punjab Zone) stated that baseless rumors are being spread by speculators having vested interests linked with price hike of sugar.
In a statement, a PSMA-PZ spokesman has denied news reports in certain sections of media that price of sugar has increased.
The spokesman categorically said that the ex-mill sugar prices have not exceeded the government’s declared limit of Rs140 per kg set by the Economic Coordination Committee (ECC) meeting on 13th June, 2024 although which was way below cost of production of sugar. Notwithstanding the benchmark of maintaining ex-mill price of Rs140 per kg, as a pre-condition for allowing exports of surplus sugar, was agreed by sugar industry under duress of sugar glut, for liquidating surplus stocks and for minimizing losses.
After government gave sugar export permission in June 2024, the ex-mill and retail prices of sugar have decreased. During this period few price corrections took place based on interplay of market forces but remained within declared parameters.
As reported by respective representatives of Punjab, Sindh and KP governments, in meeting on 13th December, 2024 with Federal Government, retail prices of sugar as of 12th December, 2024 are upto Rs130 per kg in different parts of the country. While sugar industry reported ex-mill prices of Rs122 to 125 on that date.
He added that since end of last crushing season 2023-24, sugar is being sold much below its cost of production. Due to unprecedented inflationary trends for four years in a row, cost of production of sugar dependent on prices of raw materials mainly on sugarcane and different taxes, high interest rates, wages and imported chemicals, have increased immensely.
Sugarcane prices are almost doubled in last two crushing seasons and the newly imposed taxes by the government which ultimately jacked up the cost of production of sugar. Despite this, sugar is being sold much below its cost of production since last crushing season 2023-24. Huge losses were incurred by sugar mills by maintaining surplus stocks with excessive capital costs and ban on sugar exports while the international prices of sugar were much higher.
New crushing season is ongoing smoothly, current stocks are satisfactory. Sugar production is estimated to meet domestic demand in next year. Same stance was presented and substantiated by the sugar industry to the satisfaction of Sugar Advisory Board (SAB) meeting of 22nd November, 2024.
The PSMA appeals to the government to take strong action against speculators who tend to spread baseless rumors for their personal gains and requests the media to take point of view of sugar industry on such news reports.
Copyright Business Recorder, 2024