February 18, 2006	Saturday	Muharram 19, 1427

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ISLAMABAD, Feb 17: The president and the prime minister have directed the ministry of finance and other agencies concerned to ascertain facts before taking action against 17 sugar mills, mostly in Punjab, on charges of hoarding sugar.

The directives were issued after a report on sugar crisis was submitted by the ministry of finance to Prime Minister Shaukat Aziz. The report concluded that hoarding by major sugar mills in Punjab, wrong estimates by the food and agriculture ministry, low production and problems relating to crushing of sugarcane and middlemen had created the crisis.

The presentation was made by finance ministry’s economic adviser Dr Ashfaq Hassan Khan to the prime minister’s prices committee on the second day of its deliberations that remained focussed on the sugar situation, a participant told Dawn.

Dr Ashfaq is reported to have told the meeting that until Jan 31, about 68 per cent of sugar production was being held back by Fatima Sugar, 63.8 per cent by JDW-Mill, 83.1 per cent by Tandiawala, 66.7 per cent by Kamalia, 85.8 per cent by Layyah, 82 per cent by Indus, 88.7 per cent by Hamza, 70.8 per cent by Chaudhry, 77 per cent by Ittefaq, 59.6 per cent by Ramzan, 72.5 per cent by Kashmir, 78.3 per cent by Brothers, 44 per cent by Habib, 61.2 per cent by Faran, 37.8 per cent by Al-Noor and 69 per cent by Shahmurad. He said the Miran Sugar Mills produced 30,000 tons of sugar that went unreported in the sugar industry’s record.

Some members of the committee held the ministry of finance equally responsible for the crisis and asked why had the ministry not taken appropriate action. Chairman of the National Reconstruction Bureau Danyal Aziz and MNA Kashmala Tariq criticized the finance ministry’s policies.

The meeting was informed about the involvement in hoarding of 17 sugar mills in Punjab and up to 86 per cent of these mills’ production was still lying within their premises. Some of these mills belonged to ministers, the report said.

According to sources, the meeting was informed that the government would have to provide about 22 per cent subsidy to ensure sale of sugar at Rs27 per kilogramme through outlets of the Utility Stores Corporation until June 2006. A crackdown on sugar mills was recommended to help ease supply shortages.

Dr Ashfaq Hassan Khan, however, told Dawn that the question of subsidy or crackdown on sugar mills were not discussed at the meeting. He said various sugar mills were withholding their sugar output and prices could ease, if they made normal releases. He said the figures could be confirmed from quarterly sugar data released by the Pakistan Sugar Mills Association (PSMA).

Dr Khan is reported to have said that the ministry of food, agriculture and livestock (Minfal) estimated the final sugarcane production to be 45.88 million tons but reduced the estimate to 40.1 million tons after two weeks.

He attributed other factors for the fall in sugar production to delay in crushing season, which started in November instead of its usual start in October, and only three per cent increase in annual output rate.

The meeting was informed that the crushing in Sindh was 34 per cent lower than last year, resulting in 35 per cent less sugar production. Similarly, crushing in Punjab was 40 per cent lower and production was reduced by 46 per cent. Moreover, the recovery rate for the current year decreased to 7.53 kg of sugar from 100-kg of sugarcane against last year’s recovery rate of 8.56 kg.

Dr Ashfaq said that farmers earned about Rs10-12 billion more because of higher sugarcane prices but some participants challenged the claim and said the benefit went only to four or five big landlords sitting in parliament. They said growers were adversely affected by the crisis.

Dr Ashfaq is also reported to have told the meeting that if sugar imports were allowed at $480 per ton, it would translate to Rs36 per kg in the local retail market. He also told the meeting that 553,153 tons of raw sugar and 736,868 tons of refined sugar had been imported till December 31, 2005, while there were plans to import over 200,000 tons of more sugar.