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Sugar price jumps to Rs70 a kg

KARACHI: The retail price of sugar has increased to Rs70 per kilogram from Rs67 a few days ago despite the fact that retailers hold stocks purchased at old rates during Ramazan.

The retail price ranged between Rs63-65 per kilogram during the holy month. Retailers blame wholesalers for pushing up the rates while wholesalers point the finger at sugar millers.

The wholesale price of sugar has risen to Rs65-65.60 per kilogram from Rs60-62 in Ramazan despite carryover stocks of over one million tonnes in the country.

Karachi Wholesale Grocers’ Association (KWGA) Chairman Anis Majeed said millers had raised prices as the season is drawing to a close and sugarcane crushing to produce sugar would get under way from October/November.

He said retailers were overcharged by Rs5 on a kilogram as the city government had fixed the wholesale price at Rs60/kg. He said the city government officials should discuss price with Sindh sugar millers as their head offices are based in Karachi.

The government has changed the tax structure from July 1 to sales tax from federal excise duty (FED) for sugar traders. One reason for the price hike might be the fact that the sales tax rate was 10 per cent for those who do not file their tax returns and 8pc for filers, Mr Majeed said.

Sugar remained in high demand on the back of rising production of juices, squashes and soft drinks over the previous year.

According to the Pakistan Bureau of Statistics, soft drinks’ production rose to 2.47 billion litres in July-May 2015-16 as compared to 2.36bn litres in the same period of fiscal year 2014-15. The production of juices, syrups and
squashes also increased to 303.2m litres in July-May 2015-16 from 295.2m litres in the same period a year ago.

Sugarcane production during the previous fiscal year was 65.5m tonnes, a rise of 4.2pc compared to 62.8m tonnes a year ago. Sugar output in July-May 2015-16 stood at 5.108m tonnes as compared to 5.149m tonnes in the same period of 2014-15.

However, importers of sugar (including some pharmaceutical companies) enjoyed low prices prevailing in the world market. The import bill for 11,607 tonnes of sugar during July-May 2015-16 was $6m, the same amount spent on imports of 9,499 tonnes a year ago.