950805

No escape from

sugar import,

subsidized sale?

ANWAR RAJANI

KARACHI: The import of white sugar seems inevitable and the government may have to subsidies its sale following an unprecedented rise in the prices of the commodity in local market.

The abrupt price hike is attributed to the jump in the ex-mill rate ranging from Rs 14 to 14.50 per kg. About a couple of months ago, the ex-mill sale was going on at Rs 11.50 to 12 per kg.

At present, sugar is fetching Rs 17 and 17.50 per kg in retail. The retailers blame the wholesalers and the wholesalers blame the mill-owners.

Sugar manufacturers contend that about eight lakh tons sugar is lying in the godowns of the mills and this quantity will suffice till the next season of sugar-cane crushing starts in the middle of October. They are, however, mum over the increase in the ex-mill price.

About three months ago, the government had reluctantly allowed the millowners to export three lakh tons sugar. The permission was given on the undertaking of the millowners that they would not increase the prices till the next seasons starts.

Official sources told Business Recorder on Saturday that millowners had not fulfilled their obligation and had created an artificial crisis in the market. The government, sources said, has therefore withdrawn the duty on the import of sugar.

Market sources, however, said that the import of sugar is not feasible for the private sector, because the price in the world market ranges between 400 and 425 dollars per ton. If imported at this rate, the landed cost will be above Rs 14 per kg.

Sources said that the government will have to import the commodity and sell it at a subsidized rate. "No private party can afford to import at the rate of 425 dollars per ton," the sources added.

There are reports circulating in the market that the government will enhance the support price of sugar-cane for the next season and, therefore, the millowners had increased the ex-mill price - in advance.

It is also reported that the government may soon ask the millowners to keep their promise and unload the commodity in the market at the earliest at ex-mill price of Rs 11.50 per kg.

In case the millowners do not agree, sources said, the government may find out some other way that may lead to the unloading of sugar in the market at the old ex-mill price, for the benefit of the consumers.