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Sugar prices crash in wholesale market

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    Sugar prices crash in wholesale market

    if the trade opens up pakistani people may pay less for all consumer items .

    Sugar prices crash in wholesale market

    By Masood Anwar

    KARACHI: Sugar prices in the country on Thursday crashed as prices of white refined crystal sugar crossed the barrier of Rs24,000 per tonne - lowest mark in the new season. Prices of white refined sugar on Thursday in the wholesale market were ruling at Rs23,900 per tonne, reduced by Rs500 per tonne as compared to the prices quoted at the start of the week. It is the flood of cheap imports from India that crashed the prices in the domestic market, a prominent dealer in Jodia Bazaar - wholesale market of sugar in Karachi - told The News.

    Everyday, several racks loaded with Indian sugar are unloaded in Lahore. Lack of demand and over supply turned the market into sellers' market, he commented. It may be mentioned here that Ministry of Finance is investigating the scam of revalidation of expired letters of credit for the import of sugar from India in the back dates.

    The government had imposed a complete ban on the import of white refined sugar from India. However, it allowed meeting of all the agreements where letters of credit were opened at the time of imposition of ban. Pakistan Sugar Mills Association (PSMA) - apex body of sugar producers in the country - already demanded complete audit of the opening of letters of credits. Main characters in the scam of revalidation of expired letters of credit are two importers - one is Lahore base and the other is Karachi base, sources said.

    They opened new letters of credit in the back dates and used it for very small branches of banks located in the far-flung areas, sources in the PSMA revealed.

    According to the initial estimates, expired letters of credit of about 200,000 tonnes sugar have been revalidated in the back dates. There is no further requirement of import of sugar as the country has already enough stocks to meet its requirement, a sugar producer said. At the end of the first half of July, stocks remaining at the mills are about 1.127 million tonnes. Heavy stocks of imported sugar are not included in this figure, dealers said.

    Market sources are predicting further slump in the sugar prices. At the moment, market is dull, dealers said. There is no demand in the market, they added. Indigenous industry cannot compete with the Indian industry as the raw material - sugarcane - is available to the Indian industry at the rate of Rs17-Rs18 for 40 kgs as compared to the prices in the country at Rs55-Rs60 for 40 kgs. Furthermore, the Indian government is providing heavy subsidy on the exports of sugar to Pakistan at the dumping prices.

    According to the market sources, Indians still have a surplus stock of 1.2 million tonnes available for exports. Due to the inferior technology using in Indian industry for the refining of sugar, there is no place of Indian sugar in the international market.