November 15, 2001	Thursday	Shaba’an 28, 1422

ISLAMABAD, Nov 14: The Pakistan Sugar Mills Association (PSMA) on Tuesday unanimously decided to postpone the sugarcane crushing for indefinite period, saying that mills would not resume sugarcane crushing until sugar prices come to a reasonable level in the market.

“We demand the market price of sugar between Rs24 to Rs25 per kg, which includes Rs3 sales tax and the industry only is in a position to get Rs21 to Rs22 per kg as against the present market price of Rs19 to Rs19.25 that minus the sales tax, comes to Rs16 to Rs17,” the PSMA (Punjab Zone) decided this in the meeting presided over by its chairman Zaka Ashraf here.

The participants of the meeting were of the unanimous view that the deepening crisis had led to total collapse of the sugar industry and now the industry appears to be not in a position to start the next crushing season that was to start from Nov 27.

The meeting noted with concern that the low sugar prices did not even cover the cost of sugarcane and production.

“Each mill in the province has suffered minimum cash loss of Rs150 million, which cannot be even recovered in the next five to six years even if the government formulates industry-friendly policy,” it remarked.

The PSMA strongly criticized the surplus import of sugar into Pakistan when the Economic Committee of Cabinet (ECC) reduced the import duty on June 18, 2001 from 15 per cent to 10 per cent in spite of the directives by the President General Pervez Musharraf for increase in the duty from 15 to 20 per cent.

The meeting condemned the ECC decision to continue with the sugar import, saying that it was done at the time when the country did not require importing the commodity and domestic requirements had been fulfilled with the import of 600,000 tons of raw sugar.

“This reduction in the import duty has sabotaged the efforts of the President to revive the industry and economy of Pakistan as it has cost the exchequer $300 million,” chairman of the association said.

The participants of the meeting viewed with great concern that due to the glut in the open market and the sugar lying in the godowns, the prices fell to almost Rs700 per 50 kg bag, which was the highest crash in the history of the industry. “Such crisis had never been witnessed with such policies ever before,” they complained.