October 05, 2006	Thursday	Ramazan 11, 1427

LAHORE, Oct 4: Prime Minister Shaukat Aziz is expected to accept or reject, totally or partially, in the next two days the conditions laid by sugar millers to commence sugarcane crushing on the dates given by the government.The millers put forward what they described as proposals for removing the snags in the way of commencement of crushing in their meeting in Islamabad on Tuesday and Wednesday with a high-powered committee constituted by the prime minister for ensuring on-time commencement of next sugar harvest in the country.

“We have been told by the committee that a summary containing our proposals for the removal of snags in the way of starting cane crushing on the dates given by the government is being forwarded to the prime minister for his decision. We have also been told that the decision on the proposals is likely to be taken in the next two days,” one of the sugar millers, who represented the sugar industry in the meeting, told Dawn from Islamabad over telephone.

The committee, comprising federal secretaries of commerce, industries and production, finance and food and agriculture, met with the representatives of the Pakistan Sugar Mills Association (PSMA) on the direction of the prime minister for talking the millers into starting crushing on time. The government wants sugar mills in Sindh to commence crushing from Oct 15 and in Punjab from Nov 1.

The sugar millers have expressed their inability to start crushing on the given dates, saying it is “economically unviable for them to comply with the government direction” because of various factors. Sindh Chief Minister Dr Arbab Ghulam Rahim was reported by a private television network on Tuesday to have said that “non-compliance by the mills would be considered as challenging the writ of the government”.

Sugarcane growers also want that the mills start crushing on time.

A sugar miller told Dawn that the meeting was held in a very cordial environment, and that the committee was “very supportive of our point of view”. “We’re hopeful that the prime minister will take a positive decision on our proposals,” he said, adding: “We have made proposals for removing the snags that can delay the commencement of crushing till Jan 15 or beyond. We have not put forward any demands or laid any conditions as reported by media earlier.”

The miller claimed that the committee had worked out the cost of sugar production in Sindh at Rs33-34 a kilo and in Punjab Rs34-35 per kilo. The unsold sugar stocks available with the mills as of Wednesday were estimated by the committee to be around 440,000 tons. Similarly, the stocks available with the private importers were worked out to be 100,000 tons, and with the Trading Corporation of Pakistan (TCP) close to 800,000 tons (including the quantities yet to be shipped into the country).

In their proposals/conditions, the millers have demanded that the government should bar the TCP from releasing its unsold stocks in the market during October and November for facilitating the mills in offloading their sugar stocks. From December, the TCP may be allowed to bring its stocks in the market in small quantities that do not put pressure on domestic prices.

The industry has also demanded removal of 15 per cent duty on export of sugar to Afghanistan in order to get rid of surplus. “The government has also been asked to impose a 20-30 per cent duty on import of raw and white sweetener, as well as put its import from India on negative list of items so that the inflow of cheaper sugar could be stopped into the country,” the miller said.

Another demand from the mills calls for revocation of the central bank’s decision to increase the cash margin for seeking working capital loans from commercial banks against the sugar stocks to 50 per cent from the previous 25 per cent, and the removal of the bar on the banks from issuing fresh loans to the mills before 30 days after the complete adjustment of the previous ones.

“If these conditions are not removed by the central bank, those will delay crushing until mid-January, as well as create difficulties for the mills in making payments to sugarcane growers,” the committee was told by the industry representatives.