Home »Agriculture and Allied » Pakistan » Sugar price surges to Rs 76-78 per kg

  • News Desk
  • Jul 31st, 2016
  • Comments Off on Sugar price surges to Rs 76-78 per kg
Despite availability of sufficient stock of sugar in the country, its retail price has surged to Rs 76-78 per kilogram as a result of a limited supply of the commodity in the market. According to official sources and traders, commodity prices usually rise during July to September due to short supply to the market by the mills. The declining trend in sugar prices is likely to start in October when sugar mills start crushing sugarcane and fresh sugar reaches the market, they further said.

According to market sources, the sweetener's price within the past two to three days jumped by Rs 30 per 50kg bag in the retail market - from Rs 3,420 per 50kg bag to Rs 3,450per 50kg bag or Rs 69 per kg as the government failed to keep a check on the forces involved in sugar price manipulation. The commodity is available at Rs 325 per 5kg at utility stores while in retail market sugar price has reached Rs 390 per 5kg - from Rs 360 per 5kg a week ago.

According to information gathered from officials and stakeholders, there is no shortage of sugar in the country but prices are going up. According to an official document of Ministry Industries and Production, during the sugar season 2015-16, 5.11 million tons of sugar was produced and stocks from the previous year stood at 0.329 million tons. Total stocks available with the sugar mills have been quantified at 5.46 million tons out of which 2.69 million tons have been sold and the balance stocks with sugar mills as on July 27, 2016 are estimated at 2.74 million tons. This sugar stock is sufficient up to February 22, 2017 at consumption rate of 0.4 million tons per month, the document revealed.

The document further maintained that international refined white sugar price was US $530/ton (Rs 55.65 per kg) on July 27. There are 84 sugar mills in the country with an annual sugar production capacity of 6.8 million tons. Capacity utilisation is 70 to 80 percent. The sugar crushing season starts from November to October. A senior Research Analyst of Pakistan Agriculture Research (PAR), Edrees Mangel said that the major factor affecting local market is the SRO dated July 1, 2016 in which the government imposed a fixed price for imported refined sugar of USD 725 per MT. Before this SRO, local buyers were getting imported refined sugar at around USD 688/MT, hence after this SRO was announced local buyers shifted to the local market thereby impacting on the price.

Explaining international sugar market situation, he said that in central-south Brazil 46.74 million tons of sugarcane had been crushed till the first half of July 20116, producing 2.83 million tons of sugar. Since the beginning of the season in April, until the first half of July, cane crushing in central south Brazil totalled 261.4 million tons which is 16% higher than the comparable period last year due to expansion in cultivated area and uninterrupted crushing season due to dry weather and no rains.

He added that total sugar production reached 13.81 million tons from April to July 2016, 3.20 million tons above the volume in the same period of 2015, resulting in a bearish trend ushering a steadier trend compared to the recent rally which accounted for USD 540 to USD 518 per MT, he said. Sugarcane production in Pakistan for the year 2015-16 increased to 65.5 million tons from 62.8 million tons showing an increase of 4.2 percent. The decline in area is due to disposal problem of cane, payment difficulties and restricted acreage of sugarcane due to lower area under sugarcane cultivation.

Copyright Business Recorder, 2016


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