LHC’s stay orders led to surge in sugar prices: report

LAHORE: A report issued by the Punjab provincial government has said that stay orders issued by the Lahore High Court in favour of mill owners led to the surge in sugar prices.

The report said that Justice Shahid Kareem, who issued a stay order on August 1, 2023, and Justice Anwar Hussain, who issued a stay order so on May 4, 2023, were the main cause of the surge in sugar prices as mill owners, middlemen and cartels were hoarding and smuggling the commodity as the court has barred the administration from talking action against such elements.

“These restraining orders have inadvertently paved the way for steady price hikes in the market,” the report said.

“Despite efforts to curb these increases, sugar prices continue to rise unchecked, affecting consumers and businesses alike,” it said.

The report highlights the involvement of sugar mills and profiteers, who are reaping substantial and unlawful gains from the ongoing price hikes.

“This illegal profiteering has left a significant impact on the average consumer, who now faces higher costs for this essential commodity,” the report said.

The Punjab provincial government had earlier delegated the authority for determining sugar prices to the “cane commissioners of Punjab through the Punjab Food Stuff (Sugar) Order 2023. The cane commissioners commenced the process of establishing a uniform pricing mechanism for sugar.”

“The current sugarcane harvesting season saw a total sugar production of 7.73 million metric tons in the country. Of this, 5.032 million metric tons were stockpiled in Punjab, fulfilling the region’s essential requirements.”

“Sugar mills and middlemen are currently selling sugar at exorbitant rates, with both profiting Rs100 per kilogram. Consequently, nearly 1.4 million metric tons of sugar have already been sold at an average additional cost of Rs40 per kilogram due to the restraining orders,” the report said.

“The provincial authorities are helpless in curtailing sugar smuggling through international routes, particularly through Balochistan to Afghanistan, which has significantly impacted strategic sugar reserves in the province,” the report said.

“These reserves, which were intended to mitigate sugar shortages in the upcoming year, now face depletion due to this relentless price surge.  Moreover, sugarcane cultivation witnessed a 17% decline, further exacerbating the situation,” it said.

Probe launched into soaring sugar prices

“The looming challenge of having to spend more on sugar imports next year could pose economic difficulties for Pakistan, as the relentless surge in international prices continues to influence domestic rates,” it said.

The report suggested that immediate steps must be taken to revoke these restraining/stay orders. Failure to do so may lead to further crises at both the national and provincial levels, it said.

“To address this issue effectively, it is imperative to involve the department of food and the district administration in inventory management and price control measures, as this is beyond the purview of the cane commissioner. Moreover, individuals speculating and profiting from the sugar price surge, often resort to WhatsApp groups must be subject to strict regulatory measures.”

Meanwhile, Punjab Caretaker Chief Minister Mohsin Naqvi chaired a meeting to discuss the issue of rising sugar prices.

During the meeting, the secretary of food briefed the meeting on the recent surge in sugar prices and the impact of LHC’s stay orders.

Naqvi issued directives to the Advocate General of Punjab to urgently file an appeal against the stay orders to immediately revoke them.

The caretaker chief minister emphasised the urgent need to bring stability to sugar prices, as continued inaction could lead to dire consequences for both the province and the country.