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Question to Pakistan comrades about sugar prices, and the commotion

Imran Khan

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Oct 18, 2007
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WE have mafias in every field
politicians mafia
judges mafia
lawyers mafia
teachers mafia
industrialists mafia
business mafia
shopkeepers mafia
street vendors mafia

even beggars mafia did not allow any other beggar to beg in their area .
 

Cookie Monster

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Oct 31, 2016
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Why there is such a huge commotion in Pakistan over the price of sugar?

What's the big deal over it?
In Pakistan...with certain commodities a few elites artificially drive the price up by hoarding said commodity and create an artificial shortage of it.

So for example in case of sugar...normally in other countries...there will be local sugar production...and the supply and demand will determine the price...
...in case of Pakistan...some a**holes store large quantities of sugar and then when the prices go up due to shortage...then they sell it.
 

Paul2

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In Pakistan...with certain commodities a few elites artificially drive the price up by hoarding said commodity and create an artificial shortage of it.

So for example in case of sugar...normally in other countries...there will be local sugar production...and the supply and demand will determine the price...
...in case of Pakistan...some a**holes store large quantities of sugar and then when the prices go up due to shortage...then they sell it.
Can't you just buy sugar from outside of the country then?
 

Flash_Ninja

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Can't you just buy sugar from outside of the country then?
Your average consumer cant really do that, its up to the importers/manufacturers who as someone already said are often part of this mafia.

They keep getting away with it because they are very well connected with rich industrialists and powerful corrupt politicians. The govt is trying to put an end to it, but they only really are able to stop small time crooks for the reasons stated.
 

Bouncer

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Can't you just buy sugar from outside of the country then?
Good question. All the sugar mills are owned by politicians who make policies in parliament. Remember, these are not the normal small sized farmers who actually grow sugar cane. These are big industrialists like Nawaz Sharif, Zardari etc. So they made a very sweat deal for themselves; they buy the raw material i.e. sugar cane at a low price and then sell the finished good i.e. sugar an artificially high price. And as a final nail in the coffin they do not allow sugar import in name of "food security and self sufficiency".

Its a beautiful business model. You can never loose money. Same model is used in most agri products. These same people own flour mills etc.

Your next question might be, if this business model is so lucrative then why aren't other businessmen setting up sugar mills all over the country? Answer: Because these are "protected industries" and you need a special permit from these very same people if you want to set up a sugar mill or flour mill.


they are very well connected with rich industrialists and powerful corrupt politicians
They are not well connected, they ARE the corrupt politicians. Nawaz Sharif, Zardari, Tareen etc own most of the sugar mills.
 

Crimson Blue

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Why there is such a huge commotion in Pakistan over the price of sugar?

What's the big deal over it?

Its complicated but I try to answer. Most of sugar factories in Pakistan are owned by political elite. They are always in government in some form for past 40 years so they always amde sure that state policies are in thier favor, for example:

No new license to build sugar factory are issued in last 20 years. Licenses are always distributed within political elite. If you are an ordinary businessman you cannot get a license to build sugar factory. I thinks there is some form of law is also involved in this to serve this political elite.

Last year when IK's government was planning to import sugar at Rs 55 per Kg, then sugar mill owners association threatened to stop buying cane crop from farmers. Government had to given in to protect farmers. Currently suragr price is around Rs 90 per Kg in Pakistan.

There is no effective state mechanism to access the total production of sugar in country. All old mechanisms are purposefully sabotaged by this political elite. So government has to ask the sugar mill owners association to estimate the production of sugar in a given year. If governemnt does not know that true supply & demand of sugar, it cannot form an effective import or production policy. During 2019, government was told that there is enough sugar supply available, so government was forced to export sugar at cheaper price than it was in Pakistan, to protect farmers' cane crop next year.

And since political elite has influence on local government's machinery, they can act as a cartel without any fear of persecution. They actually installed their puppets in 'Competition Commission Of Pakistan' (anti cartelization watch dog) to make sure if an undesirable government ever comes to power, they are kept in dark of true picture. That's why even military dictators had no clue how to handle sugar cartel. It took 18 months of legal battle for present government to remove the puppet chief of Competition Commission Of Pakistan.

Now Pakistan's media knows that sugar cartel is really strong with deep roots in system and present government cannot up-root this system abruptly due to the interest of farmers involved. So media outlets keep teasing government about sugar prices. News media has now convinced the general population that sugar price is the benchmark of government's performance.

There is probably more to it than this but this summary should give you an idea.
 
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