The Government of Punjab has granted authority to its administration to initiate the retrieval of stocks from sugar mills within three days to counter illicit trade and the surge in sugar prices.
On Monday, the provincial cane commissioner issued a notification outlining a strategy to regulate sugar prices.
The primary focus of the government’s plan is to begin the retrieval of sugar stocks from mills within three days, with deputy commissioners of respective districts overseeing the process. According to estimates, 0.2 million tonnes sugar is stored in the warehouses of about a dozen mills.
The cane commissioner clarified that sugar mills are not allowed to hold onto sold sugar for more than 15 days. Reintroducing confiscated sugar into the market is intended to stabilize prices. The fixation of sugar prices is deemed essential as sugar mills have unjustly increased prices from Rs. 100 per kg to Rs. 150 per kg, raking in undue profits of Rs. 25 billion in just three months.
The notification issued on July 31, 2023, mentioned an unprecedented surge in sugar prices, rising from Rs. 100 per kg in April 2023 to Rs. 155 per kg by the last week of July 2023. The cane commissioner investigated the causes of the price hike and attributed it primarily to hoarding and speculation in the sugar business.
Verification of stocks at sugar mills, conducted on June 22, 2023, revealed that although sugar had been sold, it was not lifted by dealers and occupiers of sugar factories, allowing these stocks to be stored in warehouses. These sold but unlifted stocks were traded to artificially inflate sugar prices and exploit the public through unjustified profits.
To address the price surge, the cane commissioner issued an order instructing buyers of sugar purchased more than 15 days before the order’s issuance to retrieve the sugar from sugar mill warehouses within three days.
Occupiers of sugar factories are prohibited from keeping sugar beyond this period. Furthermore, occupiers are required to report futures contracts for sugar to the deputy commissioner of the respective district and refrain from storing sugar bought through futures contracts for more than 15 days in factory warehouses. This order is effective immediately and valid until November 30, 2023.
