KARACHI: The cost of living has gone up significantly during the first two days of the current interim government as the prices of sugar and steel bar have witnessed sharp spikes.

Rising transportation cost due to a jump of Rs20 per litre in diesel rate, the rupee’s depreciation against the dollar and hoarding, have all combined to torment an already hard-pressed consumer.

According to sugar dealers, the wholesale rate has jumped by at Rs8 per kg to Rs153 in just two days, pushing the retail price to Rs160 from Rs150-155 per kg. At online shops, the price has shot up to Rs170 from Rs160-165 per kg.

Rauf Ibrahim, who heads the Karachi Wholesalers Grocers Association (KWGA), said the new caretaker set-up had started on a “disastrous note” as the petrol shock it delivered soon after its inauguration would be devastating for the end user.

“Like the previous government, no writ exists of the caretaker set-up,” he said, adding that speculators and investors had captured the sugar trade. “Hoarders have piled up stocks, but the government seems to be doing nothing.”

He was confident the price of sugar would drop instantly to below Rs100 per kg if the government launched a crackdown on the godowns of hoarders and millers.

“There was no need to notify the sugarcane support price of Rs425 per 40 kg by the outgoing Sindh government as the crushing season would reach its peak only in December-January, tho­ugh the government’s instruction that it begin in October-November.

“It would put more pressure on the price, keeping in view last year’s cane price of Rs300 per 40 kg,” Rauf Ibrahim added..

Output dips

As per data of Large Scale Manufacturing (LSM), sugar production had plunged by 15.3pc to 6.7 million tonnes in FY23, from 7.921m tonnes in FY22, despite an increase in sugarcane production to 91m tonnes in FY23 from 88.65m tonnes in FY22, up by 2.8pc.

Javed Sarwana, the Vice President of Pakistan Biscuit and Confectionery Manufac­turers’ Association, said the sugar crisis had reached an alarming level.

“This is nothing but an attempt by rent seekers to make illegal profits.”

Sarwana called upon the government to act against “market manipulators” so that the “practice of looting consumers” was stopped.

The downstream industry, which uses sugar as a raw material, has been jolted by such skyrocketing prices. “We are left with no option but to close down our factories if the government doesn’t come to our rescue,” Javed Sarwana added.

He urged the authorities to take immediate action against the “elements involved in cartelisation”.

The price of steel bars has hit Rs270,000-280,000 per tonne, showing a jump of Rs10,000 per tonne, M. Waqar Ghani of JS Research said.

A steel bar maker attributed the price hike to an “unprecedented rise” in the cost of energy and a highly volatile rupee-dollar parity.

He added that the industry can no longer absorb massive price fluctuations in the cost of manufacture.

During the first two days of the caretaker government, the dollar has gained Rs7 in the interbank market, pushing up the landed cost of imported raw materials and finished goods.

However, the average price of iron and steel scrap in FY23 had declined to $523 from $593 in FY22, based on import of 2.199m tonnes ($$1.152bn) as compared to 3.88mn tonnes ($2.3bn).

Plant shutdown

Balochistan Wheels Limited (BWL) has decided to temporarily halt output from August 18 to 31.

In a stock filing on Thursday, the company attributed the shutdown to drop in sales orders as a result of reduction in production volumes of local auto assemblers. The company plans to resume production from Sept 1.

Published in Dawn, August 18th, 2023