The retail price of sugar in Pakistan has surged to Rs. 150-165 per kilogram, primarily due to an increase in wholesale prices. Retailers are currently selling sugar at Rs. 150 per kg, while online grocery websites, marts, and superstores have set retail prices at Rs. 155-165 per kg. This significant price hike comes despite the sugar sector experiencing robust growth and achieving record-high earnings.
According to data from the Sensitive Price Indicator (SPI), the national average price for sugar rose to Rs. 135-160 per kg in the last week, compared to Rs. 125-140 per kg in the first week of July and Rs. 87-100 per kg in the first week of January 2023.
Rauf Ibrahim, the Chairman of Karachi Wholesalers Grocers Association, revealed that the wholesale price of sugar increased by Rs. 8 per kg in the last 1-2 days, reaching Rs. 143 per kg, as opposed to Rs. 131-132 per kg in the first week of July. He expressed concerns about the government’s inaction in addressing the soaring sugar prices, which has led sugar mills to independently raise prices.
Read more : Punjab Government Takes Action to Tame Sugar Prices
To tackle the situation, the Punjab government took certain measures in the last week of July, including seizing sugar stocks that were being hoarded for black marketing purposes. The government plans to sell the recovered sugar and direct the funds to the national exchequer. Additionally, the Punjab government intends to file cases against sugar millers and market traders for speculation. They have also granted the cane commissioner the authority to regulate the storage, transport, and distribution of sugar and set rates.
However, Rauf Ibrahim expressed dissatisfaction with the overall response of the federal and provincial governments in dealing with the issue and questioned the effectiveness of the actions taken so far. The extent of recovered sugar stocks from markets and sugar mills, which were accumulated to exploit the prevailing situation, remains uncertain.
On the other hand, the sugar sector has seen impressive profits, experiencing strong growth after several years. The listed sugar sector’s earnings increased by 23% year-on-year, reaching a record high of Rs. 14 billion in the first nine months of FY23 (Oct-2022 to Jun-2023) due to rising sugar volumes and prices.
Net sales of the sector also grew by 25% YoY to Rs. 235 billion in 9MFY23, driven by the export of 216,000 tons from February to June 2023, fetching $104 million. The government had allowed the export of 250,000 tonnes of sugar from January 2023 till June 2023. Furthermore, international sugar prices rose by 31 percent from $17.42 cts/Ib in October 2022 to $22.89 cts/Ib in June 2023 and currently stand at $24.37 cts/Ib.