Sugar prices in Pakistan remain on the rise, crossing the (Pak) Rs. 164 per kg government limit despite warnings from Deputy Prime Minister Ishaq Dar. The average national sugar price now hovers between Rs. 164 and Rs. 180 per kilogram, reports The Dawn.

While Prime Minister Shehbaz Sharif initiated a crackdown on hoarders on March 15—reducing wholesale sugar prices in Karachi from Rs. 168 per kg to Rs. 158 per kg—shopkeepers have continued to take advantage of peak demand during Ramazan.

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Rauf Ibrahim, KWGA president, accused the government of not keeping sugar prices at Rs. 130 per kg for consumers. He claimed that whereas retailers are being targeted, nothing serious has been done against sugar millers. He demanded an inquiry into the cost of production, stating that the wholesale sugar price has again risen to Rs. 168 per kg.

Contribution of Exports to the Price Increase

In the meantime, a Pakistan Sugar Mills Association (Punjab Zone) spokesperson came to the defense of sugar exports, contending that in their absence, the sugar industry would have been in ruins.

“Surge in prices are not attributed to exports. At the end of September 2024, the industry had two years of surplus sugar production in the pipeline (approximately 1.2 million tonnes valuing Rs250 billion), which was pledged with banks at a nearly 25pc interest rate. Had the government not allowed the exports, Pakistan’s sugar industry, providing $5bn of import substitution and the world’s cheapest sugar, would have collapsed,” he told The Dawn.

He further said that exports were only sanctioned after a long process of verification of excess stocks by governmental sources.

Drivers of Sugar Prices

As per the spokesperson, sugarcane prices are directly responsible for sugar prices, which vary with every crushing season. He highlighted that sugarcane farmers had been given extremely high prices of up to Rs. 750 per maund, increasing their incentives to produce more crops in future years.

He dismissed reports connecting the price hike with exports as ‘completely biased and without reason’. He blamed the increase on ‘market forces fueled by media campaigns by Satta Mafia, hoarders, and Karyana Merchants to gain unreasonable profits’, local media said.

For long, the sugar sector has suggested that the government appoint independent cost auditors to certify sugar making costs. Industry players also proposed introducing a two-tier mechanism for setting varying sugar prices, which would ensure increased transparency in prices.