LAHORE, Nov 23: Out of 38 sugar mills in Punjab, only 12 have commenced physical crushing even after the passage of one week of the date agreed for the same between the Pakistan Sugar Mills Association (PSMA) and the government last month.
“Many of the remaining mills have fired their boilers and we expect them to begin physical crushing by the end of this week,” Punjab Cane Commissioner Abdul Ghafoor Bhatti told Dawn on Wednesday. He said the mills could delay physical crushing till as late as end of November under the law.
“The law says that the mills will not delay commencement of crushing beyond November 30. If anyone does, we (the government) can penalise the defaulting mills. Before that we cannot take any action against any mill under the law controlling sugar mills,” he said.
Mr Bhatti, however, added that notices had been issued to all the mills that were yet to start crushing to do so in the next couple of days as agreed by the PSMA with the federal government.
It is feared by farmers that the delay in the start of sugar harvest could delay wheat sowing, and consequently its output, on around 200,000 acre of land in Punjab alone.
The sugar millers had agreed to start crushing in Punjab from Nov 15 and in Sindh from Nov 1 following their talks with the Secretaries Committee which was constituted by Prime Minister Shaukat Aziz for negotiating with the millers to facilitate timely commencement of sugar harvest in the country. In order to ensure that the mills commence crushing at the earliest, the committee had agreed all the demands put up by the millers and reverse all the measures taken by the government in the middle of this year to bring down the retail price of the sweetener, which at one point in time shot up to Rs50 per kg in the domestic market.
Following the committee’s talks with the PSMA, the government instructed the central bank to revoke its earlier order directing the commercial 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 also withdrew its instructions to the banks to double the requirement of cash margin to 50 per cent from the previous 25 per cent for advancing fresh working capital to the sugar mills.
The PSMA was also assured 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 and begin the new harvest with no or minimum unsold stocks. The government also imposed 15 per cent duty, including five per cent regulatory duty, on the import of cheaper sugar from India and other sources, and promised to impose anti-dumping duty to guard against disruptive dumping of the sweetener in the domestic market.
While the government delivered on all the commitments made to the sugar mills quite well in time to facilitate beginning of crushing on the agreed dates, the mills, both in Sindh and Punjab, have defaulted on their promise. “It has defeated the purpose of the formation of the Secretaries Committee and acceptance of all the demands of the mills to ensure early harvest of sugarcane in the country,” said a provincial agriculture department official, who was critical of his seniors showing leniency towards the “breach” of promise by the sugar mills.
The provincial cane commissioner, nevertheless, said the farmers were also glad on the delay in the physical crushing. “The growers sold their crop for Rs100 per maund last year. This year too they wish to make some extra money by selling their crop at a higher than the support price of Rs60 per maund fixed by the government for Punjab.”
He said the cane growers in the NWFP were already charging Rs100 per maund against the support price of Rs65 per maund for that province. Similarly, the growers in Sindh are selling their crop for Rs70 per 40 kg or more. “In Punjab we expect the sugarcane price to go up to somewhere Rs70-80 per maund,” he said.
The mills that have commenced crushing in Punjab are located in Rahim Yar Khan, Faisalabad, Bahawalpur and Sargodha.
