Sugar prices may soar to Rs200/kg

Express Tribune

05-03-2025

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Sugar prices in Pakistan are expected to rise sharply in the coming weeks, potentially hitting Rs200 per kilogram, as the country faces a shortage of nearly 1 million tonnes. Currently, sugar is selling at Rs165-170 per kg in retail markets, up from Rs159 per kg in wholesale.
As of this week, wholesale sugar prices in Lahore stand at Rs159 per kg, while retail markets are selling it between Rs165 and Rs170 per kg, a sharp jump from Rs140-150 per kg just a month ago. Speaking to The Express Tribune, Hafiz Arif, President of the Kiryana Merchants Association, attributed the shortage to excessive exports of 700,000 tonnes of sugar over the past year. "Our current stocks are barely 5.8 million tonnes, but domestic consumption is rising. Exporting such large quantities has left us vulnerable," he said.
He added that sugarcane recovery has dropped to nearly 12%, and the area of cultivation has also decreased by 20% this season. "This means estimates of total sugar production have been compromised, and market forces are predicting the per-kilogram sugar price to hit Rs200 soon. Currently, open-market or wholesale dealers do not have stocks; however, sugar mills do," Arif added.
Official data suggest Pakistan's sugar production for 2024-25 will be 6.8 million tonnes, a 3% increase from the previous year. However, with annual consumption estimated at 6.6 million tonnes, the surplus is negligible. Industry experts warn that even minor disruptions, such as hoarding or supply chain delays, could trigger panic buying.
The timing of the crisis could not be worse. During Ramazan, sugar consumption spikes as households prepare traditional sweets, sherbets, and desserts for iftar and sehri. To mitigate this blow, the government has allocated 100,000 tonnes of sugar for subsidised sales at Rs130 per kg through Ramazan bazaars across the country. "We are committed to protecting low-income families from profiteering," said a Punjab Food Department official. However, citizens say the initiative is insufficient. "Subsidised sugar covers barely 10% of the monthly demand during Ramazan. Most families will still rely on open markets, where prices are uncontrollable," said Economist Osama Siddiqi. Last year, similar measures failed to prevent prices from rising by 25% during the holy month.
A spokesperson for the Pakistan Sugar Mills Association (Punjab Zone) rejected the claims, stating that the ex-mill price of sugar has not increased abnormally, as it fluctuates based on supply and demand.
In a statement, the Pakistan Sugar Mills Association (PSMA) spokesperson said the price mechanism depends on market forces. The real beneficiaries of the artificial price hike in the retail market are the Satta Mafia, hoarders, and profiteers, who take advantage of the situation by spreading rumours to manipulate market forces for undue profits.
He added that sugar mills are already providing sugar at a concessional rate of Rs130 per kg in all districts and tehsils through Ramazan Package discount stalls in collaboration with federal and provincial governments and district administrations.
Moreover, sugarcane rates have risen to Rs650 per maund in the current crushing season. Other factors driving up sugar production costs include increased taxation on the sugar industry, expensive imported chemicals, and rising wages, he noted.
"It is an established fact that when the cost of raw materials increases, the price of the final product will ultimately rise for the industry to survive and recover production costs," the spokesperson said.
He further explained that in the current crushing season, sugarcane prices have increased significantly due to global warming effects and pest attacks on crops. "Last summer, extreme temperatures damaged the sugarcane crop. Later, when farmers needed to fertilise the crop, heavy rains in September and October severely impacted yields," he added.