The retail price of sugar has surged to Rs. 150-165 per kilogram, a significant increase attributed to the escalating wholesale prices. Retailers are now demanding Rs. 150 per kg, while online grocery platforms, marts, and superstores have set their retail prices between Rs. 155-165 per kg. This price hike comes amidst a period of robust growth in the sugar sector, which has reported record-high earnings.
According to data from the Sensitive Price Indicator (SPI), the national average price for sugar has seen a steady rise. It increased from Rs. 87-100 per kg in the first week of January 2023 to Rs. 125-140 per kg in the first week of July, and finally to Rs. 135-160 per kg in the last week.
Rauf Ibrahim, Chairman of Karachi Wholesalers Grocers Association, disclosed that the wholesale price had risen by Rs. 8 per kg in just one to two days, reaching Rs. 143 per kg. This is a significant jump from the Rs. 131-132 per kg recorded in the first week of July. Ibrahim expressed concerns over the government’s lack of action in addressing the soaring sugar prices, which has allowed sugar mills to independently inflate their prices.
In response to the escalating prices, the Punjab government implemented measures in the last week of July. These included confiscating sugar being hoarded for black marketing purposes. The seized sugar will be sold by the government, with the proceeds directed to the national exchequer. Additionally, the Punjab government plans to take legal action against sugar millers and market traders suspected of speculation. The cane commissioner has been granted authority to regulate the storage, transport, and distribution of sugar and fix rates.
Despite these measures, Ibrahim voiced dissatisfaction with the federal and provincial governments’ overall response to the issue. He questioned the effectiveness of the actions taken so far, as the extent of recovered sugar stocks from markets and sugar mills remains uncertain.
Meanwhile, Sunny Kumar of Topline Securities noted that the sugar sector’s profits are showing signs of strong growth after many years. The listed sugar sector’s earnings rose 23% year-on-year to a record high of Rs. 14 billion in the first nine months of FY23 (Oct-2022 to Jun-2023). This increase was due to a rise in sugar volumes and prices. Net sales of the sector jumped 25% YoY to Rs235bn in 9MFY23, driven by the export of 216,000 tons of sugar from February to June 2023, which fetched $104 million. International sugar prices have also risen by 31 percent from $17.42 cts/Ib in October 2022 to $22.89 cts/Ib in June 2023, and currently stand at $24.37 cts/Ib.
