Lahore: Pakistan is bracing for a sharp rise in sugar prices, with retail rates potentially hitting Rs200 per kilogram in the coming weeks. The country faces a shortage of nearly 1 million tonnes. Currently, sugar is being sold at Rs165-170 per kg in retail markets, up from Rs159 per kg in wholesale, reports The Express Tribune.
This week, wholesale sugar prices in Lahore stood at Rs159 per kg, while retail prices ranged between Rs165 and Rs170 per kg, a significant increase from Rs140-150 per kg just a month ago. Hafiz Arif, President of the Kiryana Merchants Association, told The Express Tribune that the shortage is largely due to excessive exports of 700,000 tonnes of sugar over the past year. “Our current stocks are around 5.8 million tonnes, but domestic consumption is rising. Exporting such large quantities has left us vulnerable,” he said.
Arif added that sugarcane recovery rates have dropped to nearly 12%, and the area under cultivation has decreased by 20% this season. “This has compromised estimates of total sugar production, and market forces predict prices could soon reach Rs200 per kg. Currently, open-market or wholesale dealers are out of stock, while sugar mills still have supplies,” he explained.
Official data indicates that Pakistan’s sugar production for 2024-25 is expected to be 6.8 million tonnes, a 3% increase from the previous year. However, with annual consumption estimated at 6.6 million tonnes, the surplus is minimal. Industry experts warn that even minor disruptions, such as hoarding or supply chain delays, could lead to panic buying.
The timing of the crisis is particularly concerning, as sugar consumption typically spikes during Ramazan, when households prepare traditional sweets, sherbets, and desserts for iftar and sehri. To address the issue, the government has allocated 100,000 tonnes of sugar for subsidised sales at Rs130 per kg through Ramazan bazaars across the country.
A Punjab Food Department official stated, “We are committed to protecting low-income families from profiteering.” However, critics argue that the initiative is insufficient. Economist Osama Siddiqi said, “Subsidised sugar covers barely 10% of the monthly demand during Ramazan. Most families will still rely on open markets, where prices are uncontrollable.” Last year, similar measures failed to prevent a 25% price hike during the holy month.
The Pakistan Sugar Mills Association (PSMA) has rejected claims of abnormal price increases, stating that ex-mill prices fluctuate based on supply and demand. A PSMA spokesperson said, “The real beneficiaries of the artificial price hike in the retail market are the Satta Mafia, hoarders, and profiteers, who exploit the situation by spreading rumours to manipulate market forces for undue profits.”
The spokesperson added that sugar mills are already providing sugar at a concessional rate of Rs130 per kg in all districts and tehsils through Ramazan Package discount stalls, in collaboration with federal and provincial governments and district administrations.
He also highlighted that sugarcane prices have risen to Rs650 per maund in the current crushing season, driven by factors such as increased taxation on the sugar industry, expensive imported chemicals, and rising wages. “When the cost of raw materials increases, the price of the final product will inevitably rise for the industry to survive and recover production costs,” he explained.
The spokesperson further noted that sugarcane crops have been severely affected by global warming and pest attacks. Last summer, extreme temperatures damaged the sugarcane crop. Later, heavy rains in September and October further impacted yields during the fertilisation period,” he said.
As Pakistan grapples with this sugar crisis, the government and industry stakeholders face mounting pressure to stabilise prices and ensure adequate supplies, especially during the critical Ramazan period.
