The Government of Pakistan has planned to procure 100,000 tons of sugar to build strategic reserves of the necessary sweetener.
Presiding over the National Price Monitoring Committee (NPMC) on Monday, Finance Minister Shaukat Tarin gave this order, while he expressed satisfaction over the decrease price trend for sugar in the country, dawn reported.
Reportedly, the meeting was briefed about a slight increase of 0.07pc in the weekly Sensitive Price Index (SPI) indicating an increase in price stability compared to recent weeks.
On a year-on-year basis, the weekly inflation has been coming down for the past two months from 17.23pc on 20th May 2021 to 12.28pc on 8th July 2021, compared to the same period last year.
Similarly, according to the CPI report released for June 2021, the price of sugar has gone down 0.93pc in June, compared to May 2021.
The document claimed that the national CPI for the month of June 2021 decreased by 0.24pc over May 2021. The Urban CPI recorded a decrease of 0.37pc while Rural CPI recorded a decrease of 0.06pc.
The annual inflation at the national level remained at 8.9pc which was down from 10.74pc a year ago. Similarly, urban and rural inflation stood at 8.15pc and 10.05pc as compared to 10.17pc and 11.63pc, respectively.
This showed a slowing down of inflation in the country.
National media outlet Dawn reported that the finance minister constituted a working group under NPMC to work out measures for bringing price stability in basic commodities by using mystery shopping exercises and building strategic reserves of wheat, sugar, pulses, ghee, tomatoes, onions, and potatoes to eliminate immoral profit margins and ensure availability of these items at affordable prices.
Similarly, the Pakistan Bureau of Statistics was asked to present a detailed variance analysis of weekly SPI, highlighting food prices in various cities to offer a real-time comparison, to ensure price parity is being maintained all over Pakistan.
The Ministry of Industries and Production secretary told the committee that following an upward trend for a long time, the prices of soybean and palm oils, have registered a decline.
It is worth mentioning that the market reached its peak in mid-June, and after that has been on a downward trend.
Market watchers believe that the sugar price, which is stable at around Rs96 per kilogram should be coming down over the period of a few weeks.
However, ECC believes otherwise.
A meeting of the ECC on 28th June was informed that imported sugar would cost approximately Rs104 per kg against the current retail market price of Rs98 per kg.
It was then that Finance Minister Shaukat Tarin allowed the import of 100,000 metric tons of sugar after ECC was informed about the apprehensions that speculative pressure would start destabilizing the domestic market much before the arrival of new sugar in the market.
Thus, in compliance with the decision of the NPMC, a tender for the import of 100,000 metric tons was floated through the Trading Corporation of Pakistan (TCP).
The ECC was also informed that the monthly consumption of sugar is around 0.485 million metric tons and the estimated sugar stocks at the beginning of the crushing season, mid-November 2021, are estimated to be around 0.200 million metric tons, which are too low to maintain price stability in the domestic market, Business recorder reported. This demand-supply difference would lead to an increased price of sugar in the market.