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Sugar crisis brewing              
By Afshan Subohi

Yet another sugar shortage is looming large ahead of Ramazan due to the government’s inability to import the commodity according to national needs.

The consequences of the shortage are predicted to be harsh for both consumers and the government. Soon we will find consumers either paying very high prices for the sweetener or waiting for hours in long queues to buy it in small quantities at subsidised rates.

It is difficult to say who is responsible: the Trading Corporation of Pakistan, the bureaucracy, business groups or people working on behalf of certain influential politicians? All players appear to have collaborated to manipulate the situation to their
advantage and prevent the TCP from importing 1.2 million tons of sugar before the June 30 deadline. The Economic Coordination Committee of the cabinet, too, avoided pinning responsibility on anyone in its Tuesday meeting. Some very powerful
people could be involved.

The consequences of the shortage are predicted to be harsh for both consumers and the government. Soon we will find consumers either paying very high prices for the sweetener or waiting for hours in long queues to buy it in small quantities at
subsidised rates. Though the authorities claim the country has enough sugar stocks to meet its needs over the next several months, retail prices are spiralling upwards in anticipation of the shortage. The government does not have the strategic
reserves to intervene to stabilise sugar supplies and prices. Hoarders are already in for a big cut.
 

 


Even if it wanted to, it would be difficult for the government to immediately import the commodity. If the TCP were to order it today, the earliest shipment would not reach Karachi before November. Earlier physical delivery would require the payment of a heavy premium on rising global sugar prices.

The government missed the opportunity of importing cheaper sugar when the international market had bottomed out in May. Now desperation may force the government to take harsh administrative measures to show to the public that it is doing its bit to ensure smooth sugar supply at reasonable prices.

That could prove counterproductive. We saw the commodity disappear from the market for days as a result of administrative action against sugar producers and dealers last year. It is advisable that the authorities quickly make arrangements for early imports even at higher prices to get a handle on the market.



Courtesy: The DAWN

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