LAHORE, Dec 14: The Pakistan Sugar Mills Association predicted on Wednesday a shortage of up to 700,000 ton sugar if the government failed to provide industry a level playing-field.

Zaka Ashraf of the PSMA told Dawn the industry was expecting a production of just below three million ton against a national consumption of 3.6 million ton. Although the current projection is around 3.1 million ton, the gur-making process could push the figure further down by at least 200,000 ton.

The gur-making was free from any tax whereas the sugar industry was paying 15 per cent sales tax. Given this fiscal margin, gur-making was on the rise and Afghanistan and some Central Asian states had become a major market for them, he said.

The industry, he said, had asked the government time and again to either slap sales tax on gur-making or remove it on sugar, thus, providing a level playing-field to the industry. This demand had fallen on deaf ears of policy-makers and the industry would suffer from this structural disadvantage, he said.

The crushing season had still not been able to gain momentum in spite of being half way down the month of December. Out of seven mills in the NWFP, five had stopped working. In Punjab, most of the mills had halted their operation because of shortage of cane supply, he said.

He further noted that the mills were paying even up to Rs70 per maund against the government indicated price of Rs45. But, they were still not getting the cane supply. This was a crisis situation, he added.

Instead of blaming each other, the government should look deep into causes of crisis and try to solve them, he stressed.