KARACHI, Nov 30: About 20 sugar mills were shut on Thursday because of a dispute with farmers over cane prices, but officials said the row would not hit supplies as the country had stocks from the last production cycle.

The mills in the province of Sindh, which has 28 sugar mills, stopped work after farmers increased the minimum selling price of cane to Rs80 per 40 kg from Rs67, industry and government officials said.

“The dispute is over the price. We're trying to sway farmers and sugar mills to agree on Rs67-70 per 40 kg,” said an Agriculture Ministry official who declined to be identified.

Mills in Sindh produce about 22 per cent of the total sugar output of the country, which is expected to be up to 3.6 million tons in 2006-07 season. Total domestic demand is about 3.9 million tons.

Last year, sugar mills bought cane at about Rs85 per 40 kg after the cane crop fell to 44 million tons because of low rainfall and the loss of sugar-growing land to cotton. Sugar output last year was 2.6 million tons.

This season’s cane harvest has come in at a higher-than-expected 52 million tons.

“The crop size is almost 18 per cent higher than the last year so there should be no supply constraints in any part of the country,” said the agriculture ministry official.

A sugar mill owner said farmers in Sindh had stopped selling cane for less than Rs80.—Reuters