Another sugar crisis is round the corner, as the country could face a shortage of around 250,000 metric tonnes and the price of the commodity is expected to rise in the coming weeks, sources in the industry told Pakistan Today on Wednesday.
There are multiple factors, which would result in a shortage of sugar in the country namely, the smuggling to Afghanistan, high landed cost of imported sugar in Pakistan, increase in sugar intake in Ramaazan and wrong calculations by policymakers.
Sources said that policymakers are estimating sugar consumption using data from old population census, whereas the population is increasing annually by about three per cent. They said that the US Agriculture outlook has also forecasted a shortage of 250,000 tonnes of sugar in Pakistan.
The consumption of sugar is expected to increase sharply in the holy month of Ramazan. This is largely due to the increase of intake of juices and beverages in summer. The monthly consumption of sugar in the country is estimated at 350,000 metric tonnes but in Ramaazan it would touch 500,000 metric tones. Another reason is increase in exports of products made from sugar. There has been an increase of 10 per cent in the exports of sweets and related items. “We have supplied around 10 per cent extra sugar stocks to sweet shops and bakeries,” said a sugar supplier adding that the consumption of sweets also increases around Eid.
The government has calculated that the annual sugar consumption to be 4.1 million metric tonnes based on data from 2006-2007. However, the population has increased in the last four years. According to sources the sugar consumption of the country would not be less than 4.5 million tones currently.
The smuggling of sugar to Afghanistan is also an important factor with regards to the shortage of sugar in the country. Around 350,000 tonnes of sugar has been smuggled to Afghanistan. A sugar mill owner said that the local mills could not meet the demand as this year they are expected to produce around 3.8-3.9 million tonnes of sugar and Trade Corporation of Pakistan (TCP) has around 0.5 million tonnes of stock. The accumulated stocks would be not more than 4.3 million tonnes and looking at the population based consumption at least 4.6 million tones would be required. “We would be facing a shortage of around 0.3 million tonnes of sugar and this would be have to be met through imports,” he said. He added that the cost of sugar at Karachi port is at least Rs90 per kilogram. “If we add transportation charges then the price would jump to Rs95 per kilogram,” he said. He urged the government to take measures to control the price of sugar or another crisis will start.
Currently, the price of sugar is looming at Rs70 to Rs72 per kilogram. It is also pertinent to mention that around 35 per cent stocks with TCP are not consumable and the problem would get severe. The sugar mills would also melt 150,000 tonnes of sugar for remaking. “The ghost of high sugar prices is about to come out of the bottle and it is high time that the government controls it or else once again the consumers would be left at the mercy of hoarders and profiteers,” said an official in the sugar industry.
