Govt, growers, PSMA in a row over sugar export, sugarcane support price

November 18, 2022

Mansoor Sadiq

As the sugarcane crushing season is just around the corner, the government, the growers and the Pakistan Sugar Mills Association (PSMA) are locked in a row over the export of surplus sugar and support price of cane for the 2022-23 crushing season, reports WealthPK. The farmers and growers await a government announcement about the support price, while the PSMA has a different tale to tell and seeks the government’s permission to export the surplus sugar stocks ahead of commencement of the new crushing season.

According to Section 2(h) of the Punjab Sugar Factories Control Act 1950, the crushing season begins on 1st October any year and ends on 30th June next. A few days back, the Pakistan Sugar Mills Association (PSMA) in a statement said they had surplus stocks and expressed their incapacity to store the new stocks. Citing challenges on account of climate change, the Association has urged the government to review its policies towards the new emerging issues and allow the export of surplus sugar in the interests of growers and the industry.

When contacted, Senior Vice Chairman of Pakistan Sugar Mills Association Sikandar M. Khan said a surplus of one million metric tons of sugar was available with the sugar mills for export and the government could earn $1.5 billion from the export but it was least interested in this regard. He said there were issues of sales tax evasion in the past but the former government devised a mechanism through installation of QR-Codes and CCTVs at the production units, thus putting the culture of tax evasion to an end.

“A mill owner can survive amidst the current inflation but it would be difficult for the farmers and growers to make their ends meet. The government is taking least interest and is not willing to make the sugar mills operational,” said Sikandar M. Khan. He said the sugar cost was Rs120/kg but it had to be sold at Rs85/kg. “Sugar is a mandatory item in industries and its household consumption is less than many other commodities,” said Sikandar.

Meanwhile, a senior official of the Ministry of Food and Agriculture confided to WealthPK that the ministry was waiting for the minutes of the Economic Coordination Committee (ECC) meeting which decided the cane support price for the new crushing season. In response to a question about the surplus sugar and subsequent bid to export the commodity, he said the PSMA made false claims about the surplus stocks which were yet to be verified.

“They made misleading assumptions and that’s the very reason why the government has demonstrated least interest in export of sugar,’’ said the official. The farmers and growers have also sought an increase in the cane support price from approximately Rs350 per maund to Rs400 per maund for the new crushing season. They are also of the view that delayed harvesting will make it difficult for them to sow wheat in time, which will ultimately cause a severe flour crisis in the country next year.

The obtaining scenario depicts an uncertain situation for the sugar industry as well the growers. Research economists are of the view that the prices of sugar like many other commodities should be determined by the market forces rather than by the government.


Credit : Independent News Pakistan-WealthPk