Pakistan's sugar crisis dampens festive spirits
By Hasan Mansoor, AFP
August 31, 2009, 10:53 am TWN
Pakistan, the world's second most-populous Muslim nation, is observing the holy month of Ramadan, when after the dawn-to-dusk daily fast and the Eid holiday at the end, people consume more sugar and flour than normally.
"My husband is a laborer and the only breadwinner in the family, which is why we have reduced consumption of sugar and meat despite Ramadan because we simply can't afford it," said Pakistani housewife Samina Fateh.
She lives in the poor neighborhood of Liauatabad in Pakistan's teeming financial capital of 14 million people sprawled on the Arabian Sea.
"With the same money we buy half the amount of sugar as a couple of months ago. We used to eat meat and fish twice a month, now once a month," said Fateh.
The benchmark has seen sugar futures at the New York-based Intercontinental Exchange rise five percent to 22 cents a pound for October delivery, the highest since March 30, 1981.
The federal government is offering a one-billion-rupee (US$12 million) subsidy on essential food items through a chain of state-run utility stores across the country.
"Mill owners hoarded sugar and themselves increased prices thinking the government will ultimately import," said Rana Sanaullah, law minister in Punjab, one of Pakistan's sugar-producing provinces.
"There is a lack of consumer protection bodies in the country, which is the main reason that our people suffer," he added. But mill owners take a different line, accusing the cash-strapped government of agreeing to imports too late. "The government is responsible for the sugar crisis," said Humayun Akhtar Khan, a leader in the opposition Muslim League-Q party whose family owns a sugar mill partly held responsible by some ministers.
Neighboring rival India is also reeling from a poor sugar crop, forcing it to import from ultra-expensive international markets.
The country is estimated to have only 4.5 million tons of sugar stock left, which would meet demand for just two months.