Rawalpindi’s sugar crisis deepens as merchants announce shutdown

RAWALPINDI – The city is grappling with an intensifying sugar crisis, as the Karyana Merchants Association has declared that it will cease sugar sales starting Friday as the association stated that it could no longer sell sugar at a price that leaves them with no profit margin.

“We cannot buy sugar at Rs163 per kilogram and sell it at Rs164 per kilogram,” said the association. “In addition to the cost of sugar, we incur another 10 rupees per kilogram in transportation, shopping bags, and loading expenses.”

Salim Parvez Butt, President of the Karyana Merchants Association, emphasized that they reject the government-set price of Rs164 per kilogram and are calling for wholesalers to provide retailers with a 10-rupee profit per kilogram.

In response to the situation, the Deputy Commissioner of Rawalpindi issued a warning, stating that any shop found selling sugar above the official price of Rs164 per kilogram would face legal action, including store closures and criminal charges against the shopkeepers.

Earlier, it was reported that sugar prices in Pakistan are expected to rise sharply in the coming weeks, potentially reaching 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 prices are between Rs165 and Rs170 per kg, a significant increase from Rs140-150 per kg just a month ago.

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.

Arif also noted that sugarcane recovery has dropped to nearly 12%, and the area of cultivation has decreased by 20% this season. “This means estimates of total sugar production have been compromised, and market forces are predicting the price could hit Rs200 per kilogram soon. Currently, open-market or wholesale dealers do not have stocks, but sugar mills do,” he added.

Official data suggests that Pakistan’s sugar production for the 2024-25 season will reach 6.8 million tonnes, a 3% increase from the previous year.

However, with annual consumption estimated at 6.6 million tonnes, the surplus is minimal. Industry experts warn that even minor disruptions, such as hoarding or supply chain delays, could trigger panic buying.