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‘Manipulated’ supply chain behind sugar price volatility – Pakistan

LAHORE: The government’s ‘lopsided’ surveillance mechanism, the alleged sugar cartel and above all hoarding have caused around Rs20 per kilo increase in the price of the sweetener in the last 15 days alone, leaving the inflation-stricken people with no option but to buy the commodity at higher rates.

“Two or three weeks back, the price of sugar (powdered form) imported by the government was about Rs82 or so. It gradually jumped first to Rs85, Rs87 and then 90 in the retail market. Later, at several shops, this powdered sugar disappeared and was replaced with the locally produced cubic sugar which, at most of the shops, is currently being sold for Rs90 to 100,” a customer standing at a shop in Johar Town told Dawn.

He criticised the government for paying no attention towards controlling price hike and resolving several other issues being faced by the public at large. “While the government continues focusing on the opposition by ignoring the public issues, the ‘mafia’ continues to fleece the commoners.”

According to a shopkeeper, the wholesale sugar price of a 50-kg bag was around Rs3,700/3,800 just three weeks before. And the price surged to Rs4,500 within a short time.

Flawed surveillance, hoarding cause Rs20kg increase in rate within a fortnight

“While it costs Rs90 per kg to us, how can we sell it for Rs80 or 85. That is why the per kg price has gone up to Rs100,” he added.

Talking to Dawn, a former president of Sugar Dealers Association (Akbari Mandi, Lahore) held the sugar mafia (millers, wholesalers, stockists, hoarders etc) responsible for increase in the price.

“This mafia is so strong, as whenever it wants, [it] forces people to buy the commodity at higher rates. It seems that the government has completely surrendered before this mafia,” the dealer, who requested anonymity, lamented.

He said two weeks before, the per [50kg] bag price was Rs3,700 (Rs74). But it jumped to Rs4,500 gradually to date (Rs90).

He termed the situation a result of incompetence on the part of the government that has failed to control/regulate the sugar prices which increased by Rs16 per kilo in just two weeks.

“There is no check and balance in the market right from millers to shopkeepers. Whosoever wants to increase price, can do it very easily — either by buying in bulk from the millers and then stock it, selling sugar (ex-mill price) on higher rates on the pretext of shortage or not starting the crushing season etc,” he deplored.

The sugar dealer floated a proposal for the government to control the prices. “I just request the government to ensure the sale of sugar by millers to anyone subject to submitting CNIC copies and transfer of money through a bank account. I am sure in this way, the government can easily reach those involved in increasing the sugar price,” he maintained.

When contacted, Lahore Market Committee Secretary Shahzad Cheema expressed grave concern over increase in the prices and termed the same ‘unnecessary’ profiteering by all those present in the supply chain. “We know that the sugar (both imported and local) is being sold in the open market for Rs90 to 100. There is no shortage as it is just a matter of unbridled profiteering,” he added.

He said the city administration had also directed all price control magistrates to increase the amount of fine being imposed on shopkeepers in this regard.

When contacted, Punjab Cane Commissioner Mr Zaman Wattoo held the millers and supply chain responsible for the increasing sugar price. “It is absolutely due to cartelisation of millers and the supply chain and nothing more,” he told Dawn.

He said as per sugar cane report-2 of Dec 26, the millers purchased sugarcane at Rs206 per maund [average] that meant that sugar ex-mill price should not have increased from Rs73 or 74.

According to an official source in the government, the Competition Commission of Pakistan must launch a crackdown to bring the sugar prices down.

Published in Dawn, January 7th, 2021

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