In Pakistan, the price of sugar is a crucial political and economic problem. Any little or significant increase in domestic sugar prices tends to generate a lot of media attention, and the government will often use its administrative resources to start a “crackdown” on sugar mill owners and dealers in an effort to lower retail prices.
Due to the high public interest that sugar prices receive as a result of the political backgrounds of the majority of mill owners, the judiciary occasionally steps in as well.
To “reform” the sugar trade and control prices, a “probe,” extensive studies, and recommendations are developed. However, nothing truly alters. The government’s intervention in the sugar industry to defend politically strong major cane growers and factory owners is the known cause of the ongoing “sugar price crises.”
The answer is likewise clear: the government should leave the market and there should be no limits on the free import and export of the sweetener, allowing supply and demand to work as they will.
No government, civil or military, has, however, demonstrated sufficient political will to put the solution into practise out of concern for losing the backing of substantial growers and affluent millers. Because of the guaranteed, risk-free income, both farmers and factory owners continue to have a significant investment in this crop. Therefore, it was not surprising when the conversation about sugar’s rising price picked up recently. Many have blamed the recent price surge on the former PDM government’s alleged approval of the export of “surplus stocks” that mill owners had laying around earlier this year.
Others blamed the wide disparity between domestic and international sugar prices for the unregulated smuggling of the commodity into Afghanistan.
The temporary Lahore High Court decision, according to Punjab’s caretaker administration, prevented it from keeping track of the commodity’s supply chain to guarantee that the notified price of Rs100 per kilo was being applied
Interestingly, despite constantly rising retail prices and knowledge of the temporary order that was passed in May, the caretaker administration has done nothing to have it The administration’s assessment on the situation, which was recently given to the chief minister of Punjab, is at best self-incriminating.
History suggests that the problem will disappear within the following couple of days or weeks. The retail price will also decrease until it reaches a level that is consistent with the elevated official support price for the following crop. Only a minor part of household spending are related to sugar.
The government should remove itself from the supply chain if it wants to stabilise the market. It is untrue to state that the price of sugar can either exacerbate or lessen economic shocks in households with low or intermediate incomes.
Instead than merely focusing on that, the government should work to lower these families’ entire cost of living.