October 10, 2006	Tuesday	Ramazan 16, 1427

LAHORE, Oct 9: Sugar millers on Monday agreed to start crushing in Sindh from the first week and in Punjab and the NWFP from the middle of November after the federal government promised to take affirmative action on most of their demands for removing the snags in the way of commencement of the next sugar harvest.

But the differences continue to persist between the industry and the government on the issue of a “fair ex-mill price” of the sweetener. While the industry wants Rs32 per kilo to be fixed as ex-mill rate of the sweetener produced by them, the government says it has to be determined by the market forces.

The differences between the government and the millers on the issue of ex-mill price means that the former will try to ensure that the retail rates do not escalate in the domestic as the government has no intention to stop the Trading Corporation of Pakistan (TCP) from playing its interventionist role as a price stabiliser even after the commencement of the next sugar harvest.

The industry agreed to commence crushing at a meeting of the Secretaries’ Committee constituted by Prime Minister Shaukat Aziz to ensure on-time commencement of the next sugar harvest in the country here at the office of Passco.

The meeting was attended by food, agriculture and livestock secretary Ismail Qureshi, industries and production secretary Kamran Rasool, Pakistan Sugar Mills Association (PSMA) chairman Zaka Ashraf, and PSMA leader from Sindh Shunaid Qureshi. Other senior officials of the ministry of food and agriculture were also present.

The PSMA was told by the officials that the government had accepted most recommendations of the committee that had had extensive discussions with the representatives of the industry in Islamabad last week for resolving the dispute between millers and the government over the on-time commencement of crushing.

Although no practical action has so far been initiated by the government on the demands made by the sugar millers for commencing the next harvest in the country from November, the committee is said to have assured the industry that their demands will be met as Prime Minister Shaukat Aziz has already approved the recommendations.

“The government has accepted most of our proposals and promised to remove the snags that could delay commencement of crushing into next year,” a PSMA office-bearer, who did not want to be identified, told Dawn. “We are hopeful that the government will shortly initiate action on its commitments,” he added.

Food and agriculture secretary Ismael Qureishi said all the decisions had been taken with a view to protecting the interests of consumers and growers as well as addressing the legitimate concerns of the sugar industry. The government has fixed the sugar cane price at Rs60 per 40kg for Punjab, Rs67 for Sindh and Rs65 for the NWFP. “We shall take all steps necessary to ensure that the sugar cane growers get this price for their produce, and crushing begins in November,” he said. The millers have assured the committee that they would maintain the sugar cane price fixed by the government and make prompt payments to the growers.

Secretary Qureishi said the “central bank would be advised to provide financing to the mills in time” (in the form of working capital loans in order to improve their cash flows for starting their crushing operations) without any undue pre-conditions.

The government is said to have agreed to the millers’ demand that the central bank should withdraw its earlier order, directing banks to ensure that all working capital loans obtained by the sugar mills against the security of their stocks are fully adjusted by October 31, and stopping the banks to issue fresh loans at least after one month of adjustment of the existing loans. The central bank in the same order had also doubled the requirement of cash margin to 50 per cent from the previous 25 per cent. “We have been informed that the government will shortly direct the central bank to revoke its controversial order so that timely payments can be made to the growers,” the PSMA leader said.

The PSMA leaders say the government had assured them that the Trading Corporation of Pakistan (TCP) would not sell its stocks in the domestic market during October and November to enable the mills offload their unsold stocks of the sweetener. But the food and agriculture secretary told reporters that the TCP, which has 600,000-700,000 tons unsold sweetener, would continue to play its interventionist role for stabilising the retail prices at the present level for the benefit of the consumers. He also ruled out the possibility of increase in the retail price of sugar, saying the TCP would continue to provide sugar to the consumers through the utility stores.

Though the industry sources claim that the government has decided to impose 15 per cent duty on the import of cheap sugar from India and other sources, the secretary said the government would impose anti-dumping duty to guard against disruptive dumping of the sweetener in the domestic market.