Ban on Raw Sugar Import Causes Rise in Price
ISLAMABAD: Retail price of sugar shot up to its highest ever level of over Rs48 per kg after the government rejected an advice from the ministry of industries to lift a ban on import of raw sugar in view of poor sugarcane crop.
Sources told Dawn that the continuing ban, despite repeated requests from the ministry and sugar mills, had benefited big farmers, some federal ministers among them, who sold sugarcane at prices higher than the official rate.
The official price was set at Rs80 per maund, but farmers sold sugarcane to millers at Rs100 to Rs120 because of the shortage.
For the next season, the provincial governments have increased the price to
Rs100. This is likely to cause a further increase in the price of sugar.
According to an official, the price is likely to go up in Ramazan because Utility Stores cater to the needs of only about 10 per cent of consumers.
The government had decided to keep the price of sugar at the stores at Rs38 per kg, the official added.
Sources in the industries ministry said the federal cabinet and the Economic Coordination Committee (ECC) had been informed in advance that a shortage of cane would lead to an increase in price.
‘We moved summaries to the highest forums, but these were turned down with the contention that import of raw sugar would lower the profit of farmers,’ the sources said.
Millers had also asked the government to import up to 400,000 tons of raw sugar, at least half of it during November last year when the crushing of the new crop began.
According to the sources, imported raw sugar costs $80 to $90 a ton less than refined sugar. ‘If we had imported raw sugar at that time the sugar price could have gone down by at least Rs5 per kg,’ the sources said.
An official said that the ministry was now proposing to allow the import to meet the shortage next year. ‘We are proposing to the government to allow the private sector to import raw sugar.’
For keeping the sugar price under control, the government will have to raise the subsidy for consumers and increase supply to utility stores from the current 30,000 tons to 100,000 tons.
The retail rate is hovering between Rs44 and Rs48 in major cities. However, some cities have witnessed a price of more than Rs50 per kg in the open market and consumers in some rural areas are paying up to Rs60.
Sources told Dawn that the continuing ban, despite repeated requests from the ministry and sugar mills, had benefited big farmers, some federal ministers among them, who sold sugarcane at prices higher than the official rate.
The official price was set at Rs80 per maund, but farmers sold sugarcane to millers at Rs100 to Rs120 because of the shortage.
For the next season, the provincial governments have increased the price to
Rs100. This is likely to cause a further increase in the price of sugar.
According to an official, the price is likely to go up in Ramazan because Utility Stores cater to the needs of only about 10 per cent of consumers.
The government had decided to keep the price of sugar at the stores at Rs38 per kg, the official added.
Sources in the industries ministry said the federal cabinet and the Economic Coordination Committee (ECC) had been informed in advance that a shortage of cane would lead to an increase in price.
‘We moved summaries to the highest forums, but these were turned down with the contention that import of raw sugar would lower the profit of farmers,’ the sources said.
Millers had also asked the government to import up to 400,000 tons of raw sugar, at least half of it during November last year when the crushing of the new crop began.
According to the sources, imported raw sugar costs $80 to $90 a ton less than refined sugar. ‘If we had imported raw sugar at that time the sugar price could have gone down by at least Rs5 per kg,’ the sources said.
An official said that the ministry was now proposing to allow the import to meet the shortage next year. ‘We are proposing to the government to allow the private sector to import raw sugar.’
For keeping the sugar price under control, the government will have to raise the subsidy for consumers and increase supply to utility stores from the current 30,000 tons to 100,000 tons.
The retail rate is hovering between Rs44 and Rs48 in major cities. However, some cities have witnessed a price of more than Rs50 per kg in the open market and consumers in some rural areas are paying up to Rs60.
quoted from: DAWN.com
