Govt attempts to stabilise rising sugar prices during Ramzan

Islamabad has authorised sugar imports in a bid to stabilise the rising prices of the sweetener in the country. This move follows the federal government's authorisation of the export of approximately half a million tons of sugar just weeks before placing the import order.

Authorities had granted the sugar industry permission to export on the condition that industrialists kept domestic sugar prices in the ballpark of 145 to 150 rupees per kilogram (kg). However, industrialists have been unable to keep their promise as prices have surged past 180 rupees per kg in the past week.

As per an official statement, the import order could drive prices down across the country. Moreover, local millers can expect to secure contracts to process the imported raw sugar into a final product ready for consumption.

In late February, Islamabad and the Pakistan Sugar Mills Association (PSMA) collaborated to reduce the price of sugar to 130 rupees across Pakistan for the holy month of Ramzan. However, the market price of sugar sits over 38 percent higher than the initial price that consumers had been promised.

Analysts have highlighted how credibility in the sugar industry has tanked because of their failed promise. Moreover, many believe that the hike in prices outlines the government's ineffectiveness in regulating the market.

More concerningly, the price hike during the current crushing season is being dubbed as ‘unprecedented’ given the magnitude of the rise. This spells bad news for consumers as the hike in prices could erode their purchasing power, leaving them with fewer funds to spend on other necessities.

In a classic case of corporate greed, the sugar industry decided to leverage the surge in demand during ramzan to make supernormal profits from consumers – mere weeks after they promised to abstain from such practices. The government has not made any notable attempts to crack down on the industry either.

According to reports, the general public is dissatisfied with rising prices, and some blame the government for failing to regulate the market. Alongside consumers, analysts have also taken charge to criticize the government’s actions.

As per analysts, the import order will not remedy the situation in time. This is because there are procedures to follow after an import order is placed, so do not forget the time it takes for the shipment to dock at Pakistan’s ports.

Even if there was no time lag associated with importing sugar, reports claim that it does not counter the problem at its core. For now, sugar prices are expected to continue their climb until imported sugar hits Pakistan’s shores.