The government’s strict crackdowns on hoarders and smugglers have resulted in Ex-Mill sugar prices falling by as much as Rs. 2,000 per 100kg but analysts say that the effect is expected to be temporary.
One trader told ProPakistani that due to media reports of district administrations seizing smuggled/hoarded sugar, the Sugar Satta market is shaking with Ex-Mill prices falling by as much as Rs. 2,000-2,200 per 100 kg from nearly Rs. 18,000 to Rs. 15800 per 100kg but it’s “a storm in a teacup”.
The district government in Dera Ismail Khan reportedly recovered more than 300 tons of sugar in various raids, as well as 15-20 trucks of illegal sugar. Similar claims have surfaced from Rajanpur, where more than 800 bags of sugar were seized during a raid.
“It’s true that the sugar market is under pressure in light of recent actions but it’s temporary and it will be back to Rs. 18,000 per kg by the end of this month and that is because Oct-Nov wholesale deals have already been made in Rs. 19,000 per 100 kg,” commented a market consultant talking to ProPakistani.
In related news, the Punjab Caretaker Government has decided to remove Food Secretary Zaman Watoo “on misstatement and committing misconduct in the sugar crisis”. Secretary Irrigation Wasif Khursheed has been assigned the additional charge of Food Secretary.
The Punjab Caretaker government recently blamed the Lahore High Court’s stay order along with sugar mills and speculators for the jacking up of sugar prices to Rs. 185 per kg against notified prices of Rs. 100 per kg. The report also concluded that actors including brokers and dealers have extorted Rs. 56 billion due to the stay order.
On the other hand, there have been unconfirmed reports of talks between the Government and the Pakistan Sugar Mills Association (PSMA) to set retail sugar prices at Rs. 170 per kg and though PSMA has stated it has no idea about it, there is a reason of it being a rational choice because crackdowns help nobody.
A wholesale trader lamented that the more the government restricts the movement of sugar and crackdowns on the industry, the worse is sugar crisis is expected to be across the country, especially in regions like Balochistan where sugar prices have already crossed Rs. 220 per kg in some areas as the sugar flowing to Balochistan in under heavy scrutiny due to the Afghan smuggling.
In light of these facts, experts say both the government and sugar mills realize that it’s better to sit and figure a way out rather than avoid market volatility and exacerbating the situation. The government also needs to come up with a better and more proactive way of enforcing its writ that would not result in worsening the matters for the consumers.
