Pakistan. Sugar price increased by Rs 5 per kg

22.07.2016

Sugar price has witnessed a significant increase during the past two days - from Rs 70 per kg to Rs 75 per kg. According to traders, the commodity price is likely to remain on the high side during the next few months as a result of hoarding and revision in excise duty on imported sugar. According to market sources, the sweetener's price within the past two days jumped by Rs 220 per 50 kg bag in the retail market - from Rs 3,200 per 50 kg bag to Rs 3,420 per 50 kg bag or Rs 68 per kg.

The commodity is available at Rs 325 per 5 kg at utility stores while in retail market sugar price has reached Rs 360 per 5 kg from Rs 340 per 5 kg a week ago. According to an official document of Ministry Industries and Commerce, during the sugar season 2015-16, 5.10 million tons of sugar was produced and stocks from the previous year was 3.65 million tons. Total stock available with the sugar mills has been quantified at 5.46 million tons put of which 1.76 million tons has been sold and the balance stocks with sugar mills as on May 31, 2016 was 3.7 million tons. This sugar stock is sufficient up to March 5, 2017 at consumption rate of 0.4 million tons per month, it said.

A senior Research Analyst of Pakistan Agriculture Research (PAR), Edrees Mangel said that the major factor affecting local market is the SRO dated July 1, 2016 when the government imposed a fixed price for imported refined sugar at USD 725 per MT. Before this SRO, local buyers were getting imported refined sugar at around USD 688/MT, hence after this SRO was announced local buyers shifted to the local market thereby impacting on the price. Owing to the aforementioned factor local sugar price witnessed an increase of Rs 4 per kg, he said.

Explaining international sugar market situation, he said that Thailand is the second largest sugarcane producer in the world and production there has been affected by the El-Nino weather pattern causing high temperatures and drought conditions. Due to this, Thailand's sugarcane crop is expected to decrease by around 14 percent, he said.

He said that India has imposed 25 percent duty on exports of sugar, and there is no sugar export quota from Pakistan currently resulting in low availability of sugar in the international market; he added that the UK referendum has also played its role in making the markets volatile due to which international price has risen sharply.

Mengal said that two months ago the London sugar market was trading between 460 to 480 USD per MT and currently it is trading at 550+ USD per MT. In the near future Brazil's expectedly high sugar production may help ease the market to some extent, he said.

About the extension of sugar export quota, he said that according to market reports and other sources there is very little chance that the government will extend it.

Sugarcane production accounts for 3.2 percent in agriculture's value addition and 0.6 percent in overall GDP. During 2015-16, the area sown under sugarcane crop stood at 1132 thousand hectares compared to last year's total area of 1141 thousands hectares showing a decline of 0.8 percent.

Sugarcane production for the year 2015-16 increased to 65.5 million tons from 62.8 million tons showing an increase of 4.2 percent. The decline in area is due to disposal problem of cane, payment difficulties and restricted acreage of sugarcane due to lower area under sugarcane cultivation.


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