Sugar Mills’ Cartel Blamed for Rising Sugar Prices
Sugar Mills Have Already Claimed Rs. 4.12 Billion Subsidy from Government Through Exports
Lahore: The cartel formed by sugar mill owners is being blamed for the rising sugar prices in the country. For years, this powerful mafia has been forcing the government to export sugar under the guise of extra stocks, leading to skyrocketing prices.
According to reports, even now, this cartel has managed to secure permission for exports under the pretext of surplus stocks, driving sugar prices beyond control.
Documents reveal that up until 2021, sugar mills had claimed a massive Rs. 4.12 billion in government subsidies for sugar exports, while continuing to hike local market prices, reaping billions in profits.
The documents further expose that 26 sugar mills had previously exported 400,000 metric tons of sugar and benefited from government subsidies. A significant fraud was also uncovered involving sugar exports to Afghanistan, where between 2015 and 2020, 2.35 million metric tons of sugar were allegedly exported. According to Afghan government data, 1.5 million metric tons were officially exported, while 778,000 metric tons were smuggled, with no record of the remaining quantity.
The report highlights that 38 major sugar mills owners have faced FIRs (First Information Reports) in the past for raising prices in collusion. The FIA (Federal Investigation Agency) suspected that the cartel’s price hike resulted in a whopping Rs. 110 billion being taken from the public.
Documents also reveal that between 2018 and 2020, false production cost data was provided, allowing the mills to pocket an additional Rs. 53 billion in profits. Additionally, the sugar mills evaded Rs. 18 billion in corporate taxes.
Since January this year, sugar prices have increased by Rs. 60 per kg. In March, the price was set at Rs. 140, and after the export of 750,000 metric tons, prices surged to Rs. 170. The government responded by raising the ex-mill price by Rs. 20, but the retail price hit Rs. 200 per kg.
To stabilize prices, the government has decided to import 500,000 metric tons of sugar. However, after 2021, the IMF has imposed a condition to end subsidies on sugar exports, and the government is unable to fix the price of sugarcane or provide subsidies. The IMF has also called for deregulation of sugar demand and supply.
