Utility Stores Corporation to buy 200,000 tons of sugar from millers, stockists
KARACHI: Utility Stores Corporation (USC) is procuring 200,000 tons of white refined sugar from millers and stockists as marked difference in sugar prices from the retail market and insufficient supplies have lengthened queues at its stores across the country amid lockdown ahead of Ramadan.
USC has invited bids for supply of 200,000 tons of white refined sugar to be delivered at its zonal offices in all provinces. An official said demand of all commodities including sugar had surged abnormally due to lockdown, “which would multiply as the month of fasting has arrived. Sugar consumption increases significantly in Ramadan, while certain quarters are already forecasting rise in retail prices.”
It may be mentioned here that USC bought 20,000 tons of sugar last month. Of the required 200,000 tons; Lahore and Rawalpindi would receive 14,000 tons each, 11,533 tons would be delivered in Peshawar, 8,000 tons in Karachi and Islamabad each, while the rest would be delivered at other USC zonal offices in the country.
According to Pakistan Sugar Mills Association (PSMA) Annual Report 2019, the average retail price of sugar was Rs57.7/kg in 2017, and dropped to Rs53.85/kg in 2018. In late 2019, price structure improved after export. By September 2019, prices reached Rs70.91/kg taking the average retail price to Rs64.27/kg. However, commodity was being sold at Rs80/kg in March 2020.
PSMA has projected sugar production to be in excess of 5.2 million tons for 2019-20, and with carry forward 1.39 million tons from 2018-19 total availability of the commodity be around 6.6 million tons.
Competition Commission of Pakistan (CCP) in a report previous year underlined the inability of the mills to export their sugar at internationally competitive rates as most of the millers are heavily reliant on sugar as a product and have not diversified (making optimal use of by-products) to reduce costs.
On the other hand, the government departments appear to be lacking in their assessment of price floor by either being unaware of its impact on production of sugarcane, and consequently sugar by not indulging in active forecasting of the same.
“The sugar sector suffers from inefficiencies at all levels. Serious efforts are required to design appropriate government interventions, improve sugarcane quality, enhance and diversify production processes, and improve export competitiveness,” CCP noted.