Shortage of sugar souring the mood of Pakistan public

KANJWANI, Pakistan - From the busy and bucolic scene in this Punjab Province village, it is hard to tell Pakistan is in the throes of a national sugar crisis. Fields of tall green cane line the roads, and flatbed trucks piled with ripe stalks head for a modern mill that steadily crushes tons of cane into refined white crystals.

But 200 miles north, in the crowded city of Rawalpindi, the frustration of people waiting in long lines for emergency sugar rations often erupts into tirades against the government, the hoarders, the black marketeers, and especially the wealthy families that dominate Pakistan’s lucrative sugar industry.

“Without sugar, my children will be crying when I get home. It is all because of strong people, the big owners and traders who have a lot of influence,’’ said Syed Inayat, 40, a trash collector who was waiting for his sugar ration outside a government store.

Half a century ago, a sugar shortage helped bring down Pakistan’s military regime. For the past four months, a similar shortage has led to skyrocketing prices and empty market shelves, sending consumers and officials into a panic.

The protracted drama has been marked by riots and protests, arrests and raids, accusations of price-fixing and hoarding, rationed distribution in cities, and direct intervention by the Supreme Court.

The owners of Pakistan’s 82 sugar mills have been the main targets of public wrath and official intervention. Critics and consumer activists charge that they have conspired to fix prices and hoard sugar stocks.

“Rarely, even in the rancid annals of Pakistan’s politics, has there been such a display of rampant and shameless self-interest,’’ scolded the News International newspaper in an editorial. It said mill owners are “fleecing the pockets of the poor.’’

The accusations have been given serious ammunition by the Competition Commission of Pakistan, a small government agency that has been struggling for two years to strengthen toothless antimonopoly laws.

In September, commission chairman Khalid Mirza ordered raids on the three offices of the Pakistan Sugar Mills Association.

According to the panel’s report, the investigators found numerous documents that showed “extensive institutionalization of collusive behavior’’ among mill owners, including agreements on cane and sugar prices. It was a rare glimpse into the inner workings of a privileged and insulated economic microsystem.

Pakistan is a nation of unabashed sugarholics, who heap the crystals in their tea and devour cakes at special occasions. Sugar may be far less important to the national diet than wheat or cooking oil, but it looms much larger in the national psyche. And the courts have stepped into the fray on behalf of consumers.

The Supreme Court, headed by Chief Justice Iftikhar Mohammed Chaudhry, has upheld a September ruling by a Punjab court capping the retail price of sugar at about 25 cents a pound.

The government moved tardily to defuse the crisis. Last month it imported 700,000 tons of sugar for distribution to more than 5,700 state utility stores. Consumers were finally able to buy sugar at a subsidized price - even though it often ran out and private shops continued to charge almost double.

The mill owners went on the counterattack. In news releases and TV interviews, they denied behaving like a cartel and accused the government of exacerbating the sugar crisis. The group said officials ignored its early warnings of a cane crop shortfall, then overreacted and intervened in arbitrary ways that worsened the problem.

“The media calls us a cartel, but it is all garbage,’’ said Haroon Akhtar Khan, a senator who is managing director of Tandlianwala Sugar Mills. He described the business as a series of complex price- and time-sensitive negotiations with growers, traders, bankers, and officials. “I don’t hoard or collude or manipulate, but I do need to sell my stock at the right time.’’

source: boston