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Sugar prices go up as mills stop sales
KARACHI (April 09 2004): The sugar makers have
surprised all and sundry after imposing a ban on
the sale of the commodity at least for the time
being, which according to market sources is a
decision to give rise to the commodity prices.
Consequently, there has been an immediate jump in
the prices, which have gone up by one rupee per
kilogram.
The ex-factory price has now jumped from Rs 16 to
Rs 17 per kg, particularly in Punjab.
The Economic Co-ordination Committee (ECC) on
Monday directed the Trading Corporation of
Pakistan (TCP) to purchase 0.2 million tonnes from
sugar mill-owners for export.
All Pakistan Sugar Mills Association (APSMA) on
the following day called a meeting and directed
all its members to ban the sale immediately.
Sugar dealers told Business Recorder that the
formation of this cartel was a simple market
mechanism or it could be called a trick of the
trade to sell 0.2 million tonnes to the TCP at
increased prices.
The situation is being watched till Monday next
when there is a hope for further jump in the
price.
The artificial price hike will add more to the
cost of the TCP consequently compelling the
government to pay more subsidies on the export of
sugar.
The exchequer is to bear heavy losses on export
and now it will add more losses.
Market sources said that the TCP would also float
tenders and check artificial price hike.
The sources also said that the decision of the
export might be avoided and the sugar to be
purchased by the TCP would be kept to maintain a
buffer stock. It would be carried over to the next
year when there were apprehensions of low
production of sugar owing to shortage of
sugarcane.
Courtesy Business Recorder
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Pakissan.com; Advisory Point
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