Sugar shortage hits Pak markets

ISLAMABAD, JUNE 7: Low domestic production and slow imports have created an acute shortage of sugar in Pakistani markets, pushing prices o...

ISLAMABAD, JUNE 7: Low domestic production and slow imports have created an acute shortage of sugar in Pakistani markets, pushing prices of the sweetener up by at least Rs 3 per kilogram at the retail level.

Pakistan’s annual sugar consumption is around 2.9 million tons. This year, mills could produce only 2.4 million tons of sugar because of low sugarcane yields, thus creating a shortage of 600,000 tons to 700,000 tons. The country is hoping to import at least 400,000 tons of sugar to meet domestic demand till the October crushing season. But importers claim escalating international prices which gained at least 50 dollars a ton in the last few days, have given them pause.

So far, Pakistan has placed an order for just 180,000 tons of sugar at previous prices of approximately 200 dollars per ton. Of this, 48,000 tons in four lots of 12,000 tons, is expected to reach Karachi this month. Last week, the country’s central bank withdrew the mandatory requirement of a 35 per cent cash deposit for the import of sugar, but importers claim the benefit of that facility has been eroded by escalating prices in the world market.

In Pakistan’s retail market, where a trade strike has paralyzed business activity during the last 10 days, sugar is selling for Rs 25 per kg from the earlier price of Rs 22. Housewives say hoarding by profiteers is responsible for the hike. In the wholesale market, sugar prices have increased to Rs 23 per kg from Rs 22 per kg.