Sugar prices have skyrocketed as wholesale rates touch Rs. 150 per kilogram and retail rates reach Rs. 160 per kilogram in most areas of the country, with the government unable to control the prices.
Prices have increased as the local sugar supply has declined. The government also identified sugar millers that raised their prices under the pretext of disruption in sugar supply due to TLP protests.
Two major groups are hoarding around 80,000 tons of sugar stock and are rigging the market with the help of sugar dealers, said an official from the Punjab government.
“The Punjab government is caught between a restraining order by the court (preventing lifting stocks of defaulting mills) and realities of the market. It cannot touch the mills’ stocks even if they are behaving like they are. So, these groups are now dictating the market and minting money,” explained the official.
To make things worse, sugar prices are soaring despite importing 300,000 tons of sugar, spending the limited dollar reserves in the country.
Government officials reported that imported sugar is being undersupplied, and provinces are only providing imported sugar in Sasta Bazars. Further, there is a perception that the imported sugar is of poor quality, allowing the local sugar millers to charge higher for their stock — that is more granular and crystal.
The National Price Monitoring Committee (NPMC) will discuss the sugar issue at its next meeting and possibly decide to halt sugar imports for the ongoing year to fulfill local demands, said high-ranking officials from the Ministry of Finance.