Hike in sugar price due to LHC’s stay orders, smuggling: Report

Hike in sugar price due to LHC’s stay orders, smuggling: Report

LAHORE: The Punjab government in its confidential report has held the Lahore High Court’s stay  orders responsible for rise in the sugar price while the caretaker chief minister has ordered authorities concerned to withdraw stay orders.

According to the report, orders issued by Justice Shahid Kareem and Justice Anwar Hussain of the Lahore High Court on May 4, 2023, and August 1, 2023, have paved the way for an unhindered increase in sugar prices. The report states that sugar prices are increasing without restraint, and collusion between sugar mills, brokers, and hoarders is resulting in illegal windfall profits.

The document also reveals that, in response to these court orders, the Punjab Food Department had submitted a summary to the provincial cabinet, granting Commissioner Punjab the authority to determine sugar prices through the Punjab Food Staff (Sugar) Order. The Commissioner had initiated the process of fixing ex-mill prices; however, another Lahore High Court judge, Justice Anwar Hussain, issued a restraining order on August 1, 2023, against price fixation.

The report mentions that during this crushing season, a total of 7.73 million metric tons of sugar were produced in the country, including carryover stocks. Out of this, 5.032 million metric tons were stored in Punjab, which were more than sufficient to meet the province’s requirements.

On May 4, 2023, Justice Shahid Kareem of the Lahore High Court had observed that the issue of price determination falls under provincial jurisdiction, setting the next date for September 20, 2023. As a result, the dates for restraining orders are being extended for one reason or another, and sugar mills and hoarders are profiting at the rate of Rs. 100 per kilogram.

To date, sugar mills have sold nearly 1.4 million metric tons of sugar at an extra cost of up to Rs. 40 per kilogram on average. Sugar mills, brokers, dealers, and speculators have reaped a windfall profit of around Rs. 55 to 56 billion, solely due to restraining orders.

Justice Shahid Kareem also issued restraining orders against sugar supply monitoring. The provincial authorities have failed to stop sugar smuggling to Afghanistan through Balochistan’s routes. The sugar smuggling has drained strategic reserves of sugar in the country, especially in Punjab, and these reserves were meant to bridge the gap in sugar production in the coming years.

The Punjab government is informed in the confidential report that sugarcane cultivation has decreased by 17 percent. Next year, Pakistan may have to spend its foreign exchange on sugar imports. The fundamental reason for price increases is the court orders. All cases of sugar mills are pending in Justice Shahid Kareem’s court. These cases have resulted in decisions in favor of sugar mills and against the common people and farmers.

The nexus between sugar mills and brokers is responsible for price hikes. Sugar was ample in Pakistan this year. However, due to increases in international prices, sugar mills started smuggling sugar to Afghanistan without paying any duty. The sugar prices are being raised through various WhatsApp groups. Sugar smuggling is causing its prices to skyrocket.

According to the report, every new buyer adds an extra cost of Rs. 5 to 20 per kilogram. Sugar mills support this activity because even their sugar becomes expensive without incurring any cost. The sugar situation is getting worse day by day. There is a fear of further price hikes. In other provinces, sugar prices will be even higher. Immediate action is needed to halt this deteriorating situation.

The report emphasizes the urgent need to lift stay  orders; otherwise, the country and the province will sink into further crises. Without controlled prices, the Food Department and district administration cannot take action. Those involved in speculation, brokers, or those who have wreaked havoc in the sugar market should be taken into custody under the supervision of intelligence agencies.

On the other hand, Punjab’s Chief Minister convened an important meeting in response to the increase in sugar prices, in which the Secretary Food briefed on the rise in sugar prices, attributing it to the two restraining orders issued by the Lahore High Court.

The Chief Minister directed for the immediate removal of restraining orders issued on sugar matters.


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