Pakistan. Wholesale sugar price surges to Rs 62 per kg

05.01.2017

Despite availability of sufficient stock of sugar in the country, its wholesale price has surged to Rs 61-62 per kilogram as a result of recent decision of Economic Co-ordination Committee (ECC) allowing export of 0.25 million tons of sugar. According to market sources, the sweetener's price within the past few days jumped by Rs 100 per 50kg bag in the retail market - from Rs 2,950 per 50kg bag to Rs 3,050 per 50kg bag or Rs 62 per kg as the government failed to keep a check on the forces involved in sugar price manipulation.

The commodity is available at Rs 325 per 5 kg at utility stores while in retail market sugar price has reached Rs 370 per 5 kg. According to an official document of Ministry of Industries and Production, during the sugar season 2015-16, 5.11 million tons of sugar was produced and stocks from the previous year stood at 0.329 million tons.

Total stocks available with the sugar mills have been quantified at 1.32 million tons out of which 0.094 million tons have been sold and the balance stocks with sugar mills as on December 15, 2016 are estimated at 1.23 million tons. This sugar stock is sufficient up to February 5, 2017 at consumption rate of 0.4 million tons per month, the document revealed.

According to the document, the total estimated sugarcane production for 2016-17 is 71.74 million tons out of which Punjab will produce 47.959 million tons, Sindh 18.159 million tons and Khyber Pakhtukhwa 5.592 millions. International sugar price of refined white sugar was US $499.2 ton on December 14, 2016. There are 84 sugar mills in the country with an annual sugar production capacity of 6.8 million tons. The sugar crushing season starts from November to October. A senior research analyst of Pakistan Agriculture Research (PAR), Edrees Mangel said that before the recent decision of ECC regarding export of sugar, the wholesale sugar market was trading at between Rs 57.50 and Rs 58.00 per Kg in Karachi.

After the announcement of ECC allowing 0.25 million sugar export in December last year, local markets spiked up price by about 3 to 4 rupees per Kg and the price has remained at these very levels. Currently, sugar is trading at around Rs 60.50 per kg to Rs 61.00 per kg.

He said that another reason for the increase in sugar price is attributable to aggressive buying of sugarcane at very high prices in lower Sindh from sugarcane brokers and farmers due to low availability of sugarcane in lower Sindh. He said that government had announced a support price for sugarcane in Sindh at Rs 182 per 40 kg and in Punjab at Rs 180 per 40 kg but sugar mills of Sindh have been currently paying Rs 200 to Rs 225 per 40 kg for the last week. Some mills in Sindh have also purchased sugarcane from Punjab, he said.

Mangel said that international sugar market increased soon after Christmas and New Year holidays while another factor for the firm international market has been due to the following Indian sugar market news: Indian harvest of sugarcane is coming to an early end due to a widespread cane shortage caused by drought in both major sugarcane producing states of India.


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