SINDH’S sugar factories crushed 17.8m tonnes of sugarcane this season as compared to last year’s 17.3m tonnes. Barring five upper Sindh’s sugar factories, others offered a rate lower than Rs172/40kg during the initial phase of crushing season when the indicative price was not fixed.

Not only did the cane price fluctuate during this season but even old dues payable to farmers were not fully cleared by mill owners. Official sources confirmed to this writer that dues of 2014-15 of some cane growers have not yet been fully cleared by millers. Cane buying in 2015-16 stood at Rs74.30bn of which payment of Rs73.60bn has been made. “Only Rs600-700m is outstanding against 17 mills.

But millers are gradually releasing payments,” the sources say.

If millers want to boost their business they have to work together with growers to improve cane productivity, says Jehangir Khan Tareen

Out of 38 mills in the province, 34 recorded the second highest crushing figures since 2013-14, when 18.9m tonnes of cane were crushed. Sugar output rose to 1.89m tonnes this season from 1.82m tonnes in 2014-15.

Sindh Abadgar Board (SAB) Vice-President Mahmood Nawaz Shah says factories generally paid Rs190/40kg only when crushing got in full swing. Initially, millers were paying Rs155-160/40kg when the rate was not notified by the Sindh government. “Sugar factories, for a brief period, paid Rs200-220/40kg when they found limited sugarcane supplies,” he claims.

Sugarcane growers, who through the SAB have challenged the Jan 4 Sindh government’s notification of Rs172/40kg, conceded before the court that they were paid Rs200/40kg for some quantity but not provided receipts by the mills for such transactions.

Millers have resisted the rate of Rs182/40kg before court saying it is not financially viable for them.

“We have reports that sugar factories in some cases paid the official price of Rs172/40kg, but they increased transportation charges by Rs20-Rs30 per maund for growers,” says an officer while requesting anonymity.

Sugar mills in Ghotki paid Rs182/40kg fixed by the Sindh government for this season.

Jehangir Khan Tareen, who owns two factories in Ghotki, is also cultivating sugarcane on over 10,000 acres. He believes if millers want to improve their business they have to work together with growers to improve cane productivity.

“We are long-term players and we engage cultivators in a working relationship,” he says. His mills’ sugar recovery rate ranges between 10.50-11pc. “When we started our first mill, recovery was just 8pc’, he recalls..

Despite the price controversy, growers cultivated cane on 316,749ha in 2014-15 against 297,558ha in 2013-14. However, a 2.2pc drop was recorded this year by the agriculture department in its final estimates.

Mahmood Nawaz Shah considers even this marginal decline in sowing area as worrisome. “The drop is in spite of the fact that at least five mills in upper Sindh paid the rate of Rs182/40kg and an alternate cotton crop had successive failures,” he remarked, and added that more cane crushing this year didn’t necessarily mean all supplies were made from Sindh.

Sugarcane supplies to mills are not limi­ted to the area where they are located.

For instance, upper Sindh mills get supplies from nearby Punjab’s districts. Even mills located in central and lower Sindh supplied cane to them for Rs182/40kg.

A representative of a mill in Mirpurkhas region confides that at one point they even paid Rs270 to get sugarcane while sugar’s wholesale price was Rs58/kg. Sugarcane’s per acre productivity in his mill’s area remained a little over 500 maunds.

Published in Dawn, Business & Finance weekly, May 30th, 2016