Much like various other industries in the country, the partition of India in August 1947 marked a fresh start for Pakistan. Initially, there were just two sugar factories in the newly formed state, and most of the sugar mills from the colonial era were located on the Indian side of the border.
This scarcity posed a significant challenge as Pakistan had to import sugar in its early years, straining its limited trading capabilities.
Over time, the sugar business gained traction, particularly among politicians, leading to a significant increase in the number of sugar mills. By the early 2000s, the initial two sugar mills had multiplied to 91. Nonetheless, Pakistani sugarcane struggled to compete on a global scale due to lower production yields and sugar extraction percentages. To counter this, the government implemented policies such as tariffs on imported sugar and subsidies for local sugar mills, encouraging further mill expansion and sugarcane farming, but the problem was not solved.
The problem is yet to be resolved
The past few months have been quite difficult for Pakistan and Pakistan’s economy; these days are nostalgic to people who lived in post partition Pakistan. The staggering prices of basic necessities have not improved despite previous governments’ promises.
Shah Jahan Ahmad, a primary school teacher, says, “In the past 16 months, rampant inflation has severely impacted consumers, exemplified by sugar’s staggering price of 210 per kilogram. With no viable substitute, sugar’s essential role in our daily lives is irreplaceable, from sweetening beverages to bakery items. He added, “As essential goods become increasingly unaffordable, survival becomes challenging for many. Addressing this pressing issue is vital to ensure access to life’s basics and help those with limited means maintain a decent standard of living.”
It is not Shah alone who is facing this issue as he lives, there are many living hand to mouth, trying to survive the crisis that has hit the economy in ways one could not imagine. There are many appealing to the government to provide some kind of relief so that something as basic as sugar is easily affordable.
Beneficiaries Profiting from the Sugar Crisis
Over the past year in Pakistan, the price of sugar has surged by over 100%, skyrocketing from 86 rupees to more than 180 rupees. In January 2023, the sugar cartel created an illusion, claiming the country had excess sugar, leading to a 125-million-dollar export of 0.25 million tons of sugar. This export allowed sugar traders to profit both domestically and internationally. Unfortunately, sugar was exported and smuggled through neighbouring Afghanistan, causing a shortage in Pakistan and driving up sugar prices. Local traders began hoarding sugar to exacerbate the situation, further inflating prices. Mian Anjum Nazir, a Sugar Trader in Pakistan, says, “The most pressing issue plaguing our nation revolves around the rampant smuggling of goods. Despite numerous production facilities and mills actively manufacturing various commodities, the looming problem still needs to be solved. He added that the reason behind this exacerbating situation is the unfortunate involvement of some institutions entrusted with the responsibility of curbing such illicit activities. Instead of preventing smuggling, they seem to be complicit in it
In an ideal scenario, if these institutions facilitated the lawful export of these goods, it could contribute significantly to the influx of much-needed foreign exchange into the country. However, the bitter truth is that sugar, for instance, continues to be siphoned off through smuggling channels, resulting in severe shortages that affect our citizens. It is imperative that the authorities address this issue comprehensively to stabilise the nation’s economy and ensure the uninterrupted flow of essential goods to the citizens.
In an attempt to regain control, the government had no choice but to resort to sugar imports, which would cost around 250 rupees per kilogram due to the rising dollar rates and the dwindling value of the rupee. All this sugar crisis is emerging just because of hoarding. Some people are involved in hoarding and have raised the price from 100 to 200 rupees within a month. The primary reason is non-action by the district administration and the provincial governments. All these governments in the provinces and the provincial governments need to take appropriate, timely steps, which is why sugar prices have increased many folds in the country. “If you look at the past 50 years’ history of Pakistan, the sugar prices are at their lowest in February and March – when the sugar crushing season is about to end, but the sugar prices start rising from April when the summer season takes off,” says Amir Sial, an economy expert.
The people who have the solution are the ones causing the problem. How? Because Sugar Millers are in politics. Asif Ali Zardari, the Pakistan People’s Party chairman, owns Sugar mills in Sindh, the Sharif family owns sugar mills in Punjab, and Jahangir Tareen, who recently formed a new political party, also owns sugar mills with his other family members. They get this money from the sugar mills to use in politics. With the elections right ahead, this revenue will be used by all these politicians to finance their political campaigns. So, had the politicians taken appropriate steps, sugar hoarding unnecessary export for profit could have been controlled.
White crystals, more like gold
An essential commodity like sugar has become gold in white for commoners living in Pakistan. Despite the historical backdrop and the complex web of political interests entangling the sugar industry, the fundamental issue remains unchanged: the burden of exorbitant sugar prices on the common person. Addressing this crisis comprehensively and decisively is essential to ensure access to essential goods, stabilise the economy, and uphold the well-being of the nation’s citizens.