Pakistan : Sugar profiteering
The government’s approval of 600,000 metric tonnes of sugar exports last year set an ex-factory price of Rs140 per kg, but now, the new ex-factory price is Rs159, giving sugar millers a Rs19 per kg windfall. Despite assurances to control prices, the government has facilitated price hikes, allowing millers to push prices up. To break this cycle, strict anti-hoarding laws and independent regulatory oversight, such as empowering the Competition Commission of Pakistan to act against cartelisation, are essential.
This is exactly what has happened. When the government permitted the export of 600,000 metric tonnes of sugar last year, it set an ex-factory price of Rs140 per kg and a retail price of Rs145 per kg. Now, after an expected market squeeze, the new ex-factory price has been set at Rs159 per kg, effectively handing a Rs19 per kg windfall to sugar millers.
Sugar millers, repeatedly accused of cartelisation, have once again managed to push prices upward while the government has rubber-stamped the increase. This cycle repeats itself year after year. Each time, the government assures the public that prices will remain under control. Each time, the opposite happens. The state actively facilitates these price hikes under the guise of official pricing mechanisms, ensuring that consumers are left at the mercy of a handful of powerful millers.
The only way to break this cycle is through strict enforcement of anti-hoarding laws. The government must actively monitor sugar stocks and impose severe penalties on millers and traders found guilty of hoarding. Surprise inspections and real-time tracking of sugar production and distribution must become standard practice.
Independent regulatory oversight is equally essential. The Competition Commission of Pakistan must be empowered to take action against hoarders for cartelisation. No single industry should have the power to dictate national pricing policies.
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Source : The Express Tribune
