Sugar price up as mills suspend supplies

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KARACHI AUG 04 (TNS): The wholesale price of sugar swelled to Rs54-56 per kilogram from Rs47 three days ago owing to the suspension in supplies by sugar mills.

Nevertheless, retailers had already been selling the commodity at Rs55-58 per kg as they did not pass on the benefit of falling wholesale prices to consumers. Traders said that Dandia Bazaar, a wholesale market, is running out of stocks as millers have stopped supplying sugar. They said the wholesale market has been under pressure since Monday.

Farid Qureishi, General Secretary Karachi Retail Grocers Group (KRGG) said the wholesale rate of sugar was Rs47 per kg three days ago. It rose to Rs50 per kg on Thursday morning and swelled further to Rs54-56 by the evening.

Wholesalers who still had some stocks are now cashing in on the situation by charging Rs54-56 per kg. He said retailers usually lift 50-100 bags of 50kg each depending on the size of their shops. Consumers will take a hit if sugar supplies are not normalized in the wholesale market immediately, he said.

Wholesalers do not keep large stocks of sugar and maintain supplies for two to three days. Sugar trading usually takes place daily depending on the arrival of the commodity from mills. Millers are refusing to honor already signed contracts.

Anis Majeed, chairman Karachi Wholesale Grocers Association (KWGA) informed the Karachi commissioner on August 3 about the suspension in sugar supplies. He said a sugar crisis may emerge as stocks in the wholesale market will last up to three days.

The wholesale sugar price issued by the commissioner is Rs49 per kg. Availability of sugar at this rate is impossible, Mr Majeed said, urging the commissioner to resolve the issue by increasing the rate.

He said sugar mills have put on hold sugar supplies across the country while claiming that they purchased costly sugarcane from growers. But sugar prices are low in view of the high cost of production, he added.

The government did not take the timely decision of allowing sugar exports, he said, adding that foreign sales suffered due to a lack of subsidy.

Sugar production rose 38 per cent to seven million tonnes in July-May on a year-on-year basis.

Sugar exports remained depressed due to lower world prices. Pakistan exported 307,862 tonnes for $161m in 2016-17 against 293,541 tonnes that earned $132m in the preceding fiscal year.

 

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