Sugar prices receive significant hike in provincial capital

LAHORE: The provincial capital is witnessing a rise in sugar prices, even with the sugarcane crushing season in full swing. According to the Dealers Association, the sugar prices had surged by 18 rupees per kilogram in just some days, with the current ex-mill price ranging between Rs140-143 per kilogram.

This is a sharp rise from the ex-mill rate of 125 rupees per kilogram in December. The Dealers Association fixed the future trading price for February at Rs145 per kilogram; however, sugar is being sold for Rs150 per kilogram in minor retail outlets.

The Dealers Association are also worried about the artificial shortage created by sugar exports due to rising prices. They warn that if the mafia behind this manipulation is not handled, in Ramadan, sugar prices could jump toRs170 Kimberly.

This is scary too, especially since last year during the approval of the federal cabinet of the export of 500,000 metric tons sugar, some conditions were imposed to ensure stable prices and supply. Among these conditions was a fixed retail price of Rs. 145.15 a kilogram, which do not seem to work now.

The situation is further compounded by the directives from the centre for the provincial governments to monitor sugar prices, and for the mill owners to ensure that the price of ex-mill sugar does not exceed Rs 140 per kilogram.

It will be interesting to see how the government manages the situation as sugar prices already have risen above these benchmarks, for opportunity costs when the demand for sugar is increasing, especially in Ramadan. An urgent need for government intervention is also necessary to contain the sugar mafia in order to prevent any rise in sugar prices.