ISLAMABAD: The Network for Consumer Protection has expressed concern at the dramatic increase in sugar price and alleged that sugar barons having clout in the government have created an artificial shortage.
Sugar price has surged to an all-time high of Rs120 per kg in a week from Rs85 on Oct 31, proving that the government has miserably failed to keep a check on food prices and provide relief to consumers, a press release issued by the organisation said on Tuesday.
Its executive coordinator, Dr Arif Azad, said roots of the problem lay in the sugar lobby’s political clout in determining sugar output, timing of import and scaremongering about rises in prices.
“For the sake of protecting consumers from artificially inflated sugar price rises, the government has to bring in regulatory measures to rein in the power of sugar lobby,” he said.
He called for an investigation to fix responsibility for a ‘criminal’ delay in sugar import which, he said, had given a chance to mill owners to sell the commodity at high prices.
Dr Azad rejected the Pakistan Sugar Mills Association’s claim that damage to sugarcane crop in recent floods was the main cause of the surge in price.
“While this may be partly true, the real reason has been collusive price-fixing behaviours which have been highlighted by the Competition Commission.”
If sugar tycoons and the government departments concerned had taken measures to import sugar in time, the commodity would have been available in the market at not more than Rs70 per kg, he said.
Dr Azad wondered as to why no policy statement had been given on the artificial sugar crisis and even the main opposition parties were not exerting pressure on the government to control the price.
However, the CCP is of the view that the crisis has evolved because of hoarding.
The commission’s chairperson, Rahat Kaunain Hassan, said it was closely monitoring the crisis and would intervene only when it found a violation of the Competition Act.
An investigation by the CCP last year had found that sugar mills were violating the rules of open market competition. The investigation was carried out after mills unilaterally raised the prices, compelling the Supreme Court to fix a rate.
Ms Hassan said the CCP was not a price regulatory authority, but it believed in the principles of free import and free market where prices were fixed on the basis of availability.
“It’s purely an issue of hoarding, and not pricing,” she said, adding that strict measures by the provinces were required to eliminate hoarding.
In reply to a question, the CCP chief said there must have been some faults in the government’s import policy.
She said the Trading Corporation should develop a mechanism under which the stocks of sugar should go to retailers instead of hoarders. The issue will not be resolved by merely opening tenders.
She said the provincial governments should launch a campaign to impound the commodity from hoarders and make it available in the market.
In India, sugar is being retailed at Rs55, in Brazil at Rs60 and in the US at Rs117 per kg.
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