KARACHI: Pakistan Sugar Mills Association (PSMA) Chairman, Iskender Khan, said that it is impossible for the sugar industries to sell sugar at Rs 80 while its calculated factory cost is Rs94-96 across the country.

In a telephonic interview from Lahore, the PSMA chairman said, “we had informed the government in and the media in October and November 2020 that sugarcane mafia was selling sugarcane at Rs270 to Rs320, but the government did not take action against them at that time.” At that time the old sugar stocks were being sold at Rs85-87 throughout the country,” he informed.

Giving a simple formula of sugar, he further said that the average per kilogram of sugar is being produced at Rs65-68 in our factories after getting sugarcane at Rs270-Rs320. Furthermore, it includes labour charges of Rs12 per kg and Rs14 per kg government taxes. Hence the factory price is around Rs91-94. Despite this, the government has directed sugar mill owners and traders to sell sugar at Rs80 in the market, he claimed.

He claimed that the government has started crushing before the time, and owing to it, the recovery of sugarcane was around 9.9 percent this year instead of 10.40 percent last year.

He said, “if the government provide us sugarcane in between Rs250, so we can sell sugar at much lower rates compared to Rs80 fixed by the government.”

“The main reason for high sugar prices in Pakistan is higher production cost, and the production cost goes up when sugar industries get raw material at higher rates,” he said. 

The chairman PSMA said that sugar brokers and sugar wholesaler purchased sugar from factories at the factory price, which is now approximately Rs94-96 across provinces. After adding transportation cost and other labour charges, they are selling sugar at Rs98-100. The retails price is around Rs105 to Rs107.

He said if the government wants to reduce sugar cost, they will have to ensure that the factories will get sugarcane at lower rates. 

He further said that government should take action against those sugar dealers who stocks the sugar at their warehouses and later sold it at higher rates. We will support the government’s effort. In this regard, he added.

Regarding the ‘Satta’ mafia as claimed by the Shahzad Akber, the Chairman PSMA said the dealers couldn’t sell sugar at fixed government rates. 

Yesterday, Lahore High Court (LHC) restrained the Punjab government from implementing a notification about fixing the ex-mill and retail price of sugar at Rs80 and Rs85 per kg. 

The mills’ counsel said the Industries Department deputed its officials to enforce sugar’s ex-mill price. They argued that the government could not implement its prices on the mills. They asked the court to set aside the impugned notification about fixing the costs of the commodity.

The author is a senior business reporter with bylines in leading newspapers and magazines across Pakistan.

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