JEDDAH: Sugar price has risen twice in December and there are indications that it might continue to rise in coming months. The commodity, which was selling for SR3 per kg in the beginning of the month, rose to SR3.50 and has been selling for SR4 per kg since last week, a visit to local shops and supermarkets revealed.
Shopkeepers say the price of sugar will go up to SR5 per kg in the coming weeks. While the price for one kg pack is almost the same in baqalas, grocery shops and major supermarkets, the prices for 5 kg and 10 kg of sugar vary by SR1.50 to SR3 respectively. A 5-kg bag in supermarkets is selling between SR16.50 and SR17.50 whereas baqalas and grocery shops are charging between SR18 to SR20. A 10-kg bag in supermarkets is selling for SR30 whereas baqalas and grocery shops are charging SR33 and above.
Mohammad Al-Kalebi, chief operating officer of the United Sugar Company (USC), the only manufacturer of sugar in Saudi Arabia, says the price of sugar has risen 33 percent during the past 12 months. He attributes the rise to external factors, especially low yield of sugar in India.
A local Arabic daily quoted him as saying that the price rise was a global phenomenon, which has not been witnessed during the last 30 years. He said it was nothing to do with speculation in the market but a gap in supply and demand.
Al-Kalebi said the price of raw sugar, which USC buys in the international market, has gone up by almost 100 percent since 2007. He expects a 20-30 percent rise in the next four months. “It is sure to affect the local market,” he said. India, a key producer of sugar and also the largest consumer of the commodity, is facing a shortfall of seven million tons.
Agriculture Minister Sharad Pawar told the Indian Parliament this month that the production of sugar in 2009-2010 may be only about 16 million tons against an estimated demand of 23 million tons. He promised to take several steps to plug the gap, including imports. India buying sugar in the international market will affect prices, which are already soaring.
Mohammad Al-Ghamdi, a wholesale trader, told the Arabic daily he expected the rise in sugar prices would lead to an increase in prices of other commodities in which sugar is used like juices and soft drinks.
Al-Ghamdi’s apprehensions are already proving to be true as Pepsi and Coca Cola this month raised their price for 300 ml bottles and cans from SR1 to SR1.50 claiming they were forced to do so primarily due to rising sugar prices.
