KARACHI: As the government finds itself in the middle of a sugar crisis, when it is already battling an acute shortage of wheat flour, traders and suppliers said on Tuesday exports of the commodities are to blame for the situation.

Traders say the prices of sugar have jumped at Karachi’s retail markets to Rs79-80 per kilogram. “Sugar in the wholesale market is available at Rs74 per kilogram which is being traded at Rs79-80 per kg in retails. The prices have shot up by Rs6 per kg in the last two days,” Farid Qureshi, secretary-general of the Karachi Retail Grocers Association, told Arab News on Tuesday.

In the wholesale market, the price of sugar has surged from Rs64 to Rs75 per kg over the week, but it retreated by Rs1 on Tuesday. “Supplies would stabilize the prices in the market, which can be achieved by banning exports and curbing smuggling to Afghanistan,” said Malik Zulfiqar, chairman of Karachi Wholesale Grocers Group.  
Sugar millers say they have increased the price of the commodity in response to rising production costs. “The cost of production of sugar has increased to Rs75-76 per kg. The ex-mill price of the sugar is Rs73 per kg. However, there is no shortage of sugar in the country,” mill owner Hajji Ghani Usman told Arab News. 

“Millers are not getting the sugarcane on the official rate of Rs192 per maund (about 37 kg) and they are forced to buy it at Rs250 per maund,” he complained. 

Last year, Pakistan allowed sugar mills to export surplus sugar after meeting local demand which stood at around 5.5 million tons. The country produced around 6.5 million tons in 2019.

Around 181,447 metric tons of sugar worth $70.6 million were exported during the first six months of the current fiscal year FY2020, according to the Pakistan Bureau of Statistics (PBS).

Traders blame the government’s policy of allowing wheat and sugar exports for the ongoing shortage.

“The government must take steps to ensure the supply of sugar and wheat as per the local population’s demand before allowing exports. Supplies will ensure price stability in the currently volatile market,” Zulfiqar said.  

Faced by the acute wheat flour shortage, which triggered a price hike to around Rs70 per kg in parts of the country, the government on Monday allowed duty-free imports of 300,000 tons to mitigate the crisis.
Pakistan has exported around 737,000 tons of wheat in the past 18 months.