Action against sugar mafia fails to impact prices

LAHORE: The government has decided to fix sugar price in a bid to stabilise its rate in the market.

The action is being planned as sugar prices are increasing again in different parts of the country. According to reports, the sweetener is now being sold for up to Rs110 per kg in different parts of the country. This is in spite of an early and improved domestic sugar harvest when compared to the one last year and the import of significantly large quantities.

Under the direction of federal government, a meeting was held here Saturday in the provincial metropolis where it was decided in principle to fix ex-mill sugar price at around Rs82 per kg. After getting formal green signal from the federal government, new price of sugar is expected to be announced by Tuesday, a senior official of Punjab Food Department said.

The announced price will at least be lesser by around Rs10-15 per kg than the prevailing prices of the sweetener. The exercise to work out production cost is being done with a view to curb price hike of sugar, which has been spiralling in the country at a time when warehouses are full of newly manufactured surplus commodity. The government wants to ensure reasonable price before onset of Ramazan.

Official sources told The News that sugar stocks of mills would be seized if manufacturers do not follow new price mechanism. Following new legal initiatives, the government now has sweeping powers about streamlining sugar supply chain, said sources.

More importantly, the provincial government on Saturday took a drastic step for launching direct supply of sugar from mills to market, bypassing brokers, who were allegedly involved in artificially jacking up price of sweetener. “We have made arrangements with certain mills for supply of sugar directly to several dealers. This process has started and it would greatly help in meeting demand of sweetener ahead of holy month of Ramazan,” said officials.

The move comes following reports of sugar unavailability at the retail level in the provincial capital. Complaints about sugar shortage have been rampant and its price is also on the rise. People complained that they have to pay over Rs110 to Rs115 for buying one kilogram of sugar.

The short supply of sugar is being witnessed in the market following strike by dealers over punitive action by the government against brokers. Resultantly, the supply of sugar in the wholesale market is still suspended to large extent. Even if sugar is available at some places, the wholesale rate is being demanded at Rs104 to Rs106 per kg.

Consumers have demanded the government to ensure availability of sugar at retail outlets at reasonable rate after curbing its black marketing.

Meanwhile, government has blacklisted those sugar mills that have not been able to supply commodity as per conditions of tender floated by Trading Corporation of Pakistan (TCP). Commenting on the development, Tandlianwala Sugar Mills Limited (TSML) contradicted the TCP measures about blacklisting mills. A spokesman for the sugar mills was of the view that the notice to TCP presented a one-sided picture and did not highlight the full history of the matter.

He said the sugar that the TCP is alleging TSML "defaulted" on, was forcibly lifted by the KP government in 2009 in the midst of a sugar crisis with the knowledge of TCP. It is thus mala fide for them to claim this is a default.

In spite of the forcible lifting of TCP sugar by the Khyber Pakhtunkhwa government, he said, the TSML paid an agreed amount of over Rs500 million to the TCP in this matter, which the notice conveniently does not mention. Even after this payment, TCP went to court against TSML. He said the submission of evidence to the Sindh High Court is now finally complete, despite repeated and deliberate attempts by TCP to delay the submission of evidence for several years. Now the case is at the final hearing stage, and even at this stage the TCP has sought several adjournments. All these facts were properly responded to after the show cause notice.