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Sugar crisis brewing
By Afshan Subohi
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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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Pakissan.com;
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