South Asia hit by sugar shortages

Thursday, August 27 2009

A massive shortage in sugar stocks in India and Pakistan has led to soaring prices and consumer unrest, BBC reported on Tuesday. The Indian govt has introduced strict limits on companies that stockpile sugar to check rising prices. Shortages led Pakistan s government to nearly double sugar prices causing public outrage ahead of the fasting month of Ramadan. The price of raw sugar worldwide has increased to its highest level since 1981, as supply concerns grow.

India is the largest consumer of sugar in the world and the 2nd largest producer but poor monsoon rains have slashed output, forcing it to rely on imports. A newspaper report says India s sugar stocks have decline to 4.5m tonnes - just enough to meet two months of domestic demand. The Indian government said bulk sugar buyers, such as biscuit manufacturers, would be allowed to store only 15 days supply. In Pakistan, a production shortfall has sent sugar prices up manifold over the last couple of months. Consumers have expressed unease about the price rises particularly ahead of the fasting month of Ramadan, when food consumption usually goes up. However, the Interior Ministry has warned factory owners that they must release sugar stocks or risk punitive action. While sugar production has fallen to around 3.7m tonnes this year from more than 4.5m tonnes last year. The govt says it is importing 175,000 tonnes of sugar on an emergency basis to meet domestic demand. Global sugar prices have been pushed up by growing demand in Brazil for sugar to be turned into ethanol for vehicle fuel and a sharp fall in production in India.

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