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Pakistan reels under a new crisis -- a sugar shortage

People wait for hours in hope of buying a few pounds of sugar. The government accuses mills of hoarding, but owners say cane production has fallen off.

September 23, 2009|Alex Rodriguez

GUJAR KHAN, PAKISTAN — The women stood belly to back in a line that curled from underneath a canopy and into the withering sunshine, elbowing and shoving to keep their place. They waited for more than three hours until finally a huddle of men began unloading from a van what the gathering desperately wanted: sugar.

Some would pay 40 rupees, about 48 cents, for just over 2 pounds of sugar and walk away beaming. Others would arrive too late and resign themselves to returning the next day.

"I come here every day but can't get any sugar," said Perveen Akhtar, 60, shouting above the market din in this northern Punjab city. "I've been waiting here for three hours. Why is this happening? Ask the people in high places."

Lately, Pakistan has been reeling from crisis to crisis. Electricity outages in the midst of torrid summer heat infuriated Pakistanis and ravaged the economy. Water shortages and sky-high flour prices ratcheted up the misery. The war against Taliban militancy rages on.

Now there's a crisis that strikes at something Pakistanis young and old, rich and poor, hold dear -- their morning, afternoon and evening tea.

Pakistanis like their tea sweet and often, and without sugar their daily routine just isn't the same. But prices have soared as sugar mills allegedly hoard supplies, leading to chaotic lines at distribution points and another headache for the government.

For a country wrapped up in an existential battle against extremists, the sugar crisis has attained unusual prominence. The issue dominates front pages and leads off newscasts. The timing factors heavily into the play; the shortages hit during the holy month of Ramadan, which ended over the weekend, when people savor a sweet cup of tea after their daily fast. It is also a time when Pakistanis, most of whom are poor, save whatever money they can to buy gifts and entertain, making special desserts, during Eid al-Fitr, the holiday that marks the end of Ramadan.

But what has also spiced up the sugar crisis is its intersection with politics and power. The government has accused mill owners of hoarding to artificially send prices higher. But many of the mills are owned by some of Pakistan's most powerful politicians.

"Out of the 85 sugar mills we have, 33 are either owned directly by politicians or indirectly through relatives," said A.B. Shahid, an economic analyst. "There's every evidence that the sugar cartel has enormous power, and has been wielding it without the slightest fear of administrative action."

Sugar mills hoarding their stockpiles isn't the only reason prices have shot up from an average of about 34 cents for 2.2 pounds last year to a peak of 63 cents this summer. Many farmers switched to wheat this year to capitalize on a government move to raise the minimum price for that crop. That contributed to a drop in sugar cane output, from 4.7 million tons in 2008 to a projected 3.2 million tons this year. Water shortages also have played a role.

Mill owners blame the government. Last year, they said, they knew that farmers would be producing a smaller crop this year and asked the government to import 700,000 tons of raw sugar to keep prices stable. The government balked, said Iskander Khan, chairman of the Pakistan Sugar Mills Assn.

Khan denied that mills were hoarding. "Hoarding means something hidden, kept away," he said. "But this isn't the case with the sugar industry. We declared all of our stocks."

Experts and government officials disagree and say hoarding has aggravated the shortfall. In Punjab province, the heart of Pakistan's sugar industry, police have raided mills and seized thousands of tons of sugar that the government said was being held back to artificially raise prices.

Police in the southern Punjab city of Rahim Yar Khan said they recently arrested 13 people on charges of hoarding. Checkpoints have been set up on the city's outskirts to prevent the mills from moving sugar to different locations.

But experts say police do not have the manpower to deploy officers at all of the nation's mills. And, even if police ranks were beefed up, officials probably wouldn't dispatch officers to mills with ties to the government or major political parties.

"If there is one industry that best reflects the underlying power structure in Pakistan, it is sugar," Adeel Malik, an economist at the University of Oxford, wrote in a commentary published in the News, a Pakistani daily. "The role of politics is central -- from the sanctioning of a sugar mill to its financing and operation."

The crackdown, Shahid said, "was just to give the impression that the government was doing something."

The people lined up in Gujar Khan were just as pessimistic. Though the Lahore High Court has stepped into the fray and fixed the retail price of sugar at 40 rupees per kilogram, or 2.2 pounds, sugar remains scarce.

"I've been coming here every day for the past month, and only once did I get sugar," said Sabir Hussain, 75, who had stood in a separate line for men for 3 1/2 hours. "I have six daughters and 16 grandchildren in my house. Our family is huge . . . I just hope we get sugar today."


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