20000208

Govt asks sugar makers

to explain price raise

ANWAR RAJANI

KARACHI: The federal govenrment has asked the sugar millowners to explain why they have raised the price of the commodity from Rs 16.50 to Rs 19.50 per kg at ex-factory level.

The millowners' contention is that the cost of production has gone up in the recent past and the price hike was unavoidable. They said that the government had fixed the sugar cane price at Rs 36 for 40 kg. But due to shortage of cane they were paying Rs 50 for 40 kg to the growers.

According to trade sources, sugar import has become inevitable. Total production may not go beyond 2.8 million tonnes, against last year's production of 3.5 million tonnes. Some of the quantity finds its way to border outlets every year. Therefore, the sugar produced this year would not suffice for local consumption.

According to reports reaching here from Islamabad, the government is likely to reduce the import duty by 10 percent, from the present rate of 45 percent, to facilitate the import of the commodity.

Market sources said that imports, with reduced duty, would certainly bring down the prices.

Due to sugar cane shortage, the millowners have decided to close down the mills by February 28. Usually, the mills continue operations every year till the end of March.

At present, the sugar prices in retail ranging from Rs 21 to Rs 22 per kg. About a week ago, it was available at Rs 19 per kg.