ISLAMABAD – With sugar prices having risen astronomically in the past one year, the country’s annual sugar consumption is expected to decline by up to 1 million tonnes to 3.2 million tonnes. An official source said this assessment had been made by the Ministry of Industries when it noticed that monthly sugar consumption had gone down from 350,000 tonnes to 270,000 tonnes.
The decline in sugar consumption is attributed to the commodity’s high price, currently Rs 75 per kilogramme, compared to Rs 50 per kg last year. The estimates have convinced the government that there is no need to import sugar and strategic reserves of 0.7 million tonnes should be maintained to avoid any artificial shortage.
The source said the government was contemplating administrative steps to quash the cartel of hoarders, who usually created artificial shortage during July-August period. The decline in sugar consumption is also evident from the stock position of the Trading Corporation of Pakistan (TCP).
TCP imported 1.08 million tonnes of sugar last year against a target of importing 1.2 million tonnes of sugar to bridge the demand and supply gap. However, the TCP dropped its plans of importing another 100,000 tonnes, as it had sugar stocks of 439,547 tonnes on January 20, 2011. But the source said the Ministry of Industries was still calculating sugar consumption on a basis of 350,000 tonnes per month to remain on the safe side and “not allow hoarders to take advantage of a downward consumption shift”.
The Pakistan Sugar Mills Association (PSMA) is estimating a sugar harvest of more than 3.5 million tonnes and with available sugar stocks of 439,547 tonnes, there seems to be no need for imports. The government has also taken a tactic decision by abolishing all duties on import of raw and refined sugar. But with a low demand for sugar, importers have shown little interest even though sugar from India could be bought at Rs 63 per kg.
People buy less sugar as prices hit the roof
