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Sugar still selling for Rs75 a kg despite drop in wholesale prices

KARACHI: Retailers continue fleecing consumers by selling sugar at higher prices of Rs72-75 per kg despite a decrease of Re1 to Rs1.50 per kg in its wholesale prices in the last one week.
Surprisingly, retailers tried to justify the steep prices by quoting a higher wholesale price of Rs69.50 per kg which was actually Rs67.50 per kg a week back.
In the months of June and July, when Ramazan and Eid festivities were at peak, sugar was available at Rs63-65 per kg in retail markets while the wholesale rates were Rs60-62 per kg.
So far, no serious steps have been taken by the federal, provincial and city governments to curb the surging sugar prices.
Wholesalers put the onus on sugar millers for raising the prices while retailers attributed changes in prices based on wholesale rates.
Retailers turned out to be the main beneficiaries as they had been making money on the stocks purchased on old rates.
Chairman Karachi Wholesalers Grocers Association (KWGA), Anis Majeed said the wholesale price is now quoted at Rs66 to Rs66.50 per kg as compared to Rs67.50 per kg – the highest wholesale price – all of which are still less than the Rs69.50 per kg being quoted by retailers.
He said thin demand of sugar had caused decline of the wholesale price. “Based on current wholesale rates, sugar price at retail level should not exceed Rs70 per kg,” he said.
Sources in the market said the sweetener’s retail price started crawling up since December 2015 after government’s decision of allowing 500,000 tonnes of its exports with a subsidy of Rs13 per kg till March 31, 2016. At that time sugar price jumped to Rs60-62 instantly from Rs55 per kg.
Prior to that a subsidy of Rs13 per kg was given after allowing 650,000 tonnes of sugar exports coupled with a 40 per cent regulatory duty on the import of raw and beet sugar to protect the powerfull lobby of sugar millers.
So far the subsidies and RD on sugar import has played havoc with the prices instead of providing any boost to the ailing exports owing to depressed sugar prices in world markets.
Around 12,000 tonnes of sugar worth $6.2 million were imported in 2015-16 as compared to nearly 10,000 tonnes costing the same amount of money in 2014-15.
Sugar exports remained nil from April to June 2016. Total sugar exports fell to 293,541 tonnes (fetching $132m) in 2015-16 from 708,358 tonnes ($322m) in 2014-15.



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