HYDERABAD, Jan 3: The Pakistan Sugar Mills Association has not gone ahead with its plan to challenge the support price of sugarcane fixed by the government as almost all mills – 30 out of 35 – have started crushing and buying cane at the official price of Rs172 per 40kg, albeit with deductions.
PSMA officials told Sindh’s secretary of agriculture, Agha Jan Akhtar, early December last year that the association would challenge the official price and mills were not ready to fire boilers till the price was decided upon.
But the association has not yet made any move to take the matter to court, neither has it issued any statement to clarify its position.
The chairman of the PSMA’s Sindh zone, Aslam Farooq, appears unwilling to offer any comment.
The Sindh cane commissioner office confirmed that 30 sugar mills had started crushing by Dec 21 and three more — Mirza and Pangrio in Badin district and T.M. Khan sugar mills in Tando Mohammad Khan district — would begin crushing by Friday.
The remaining two, Najma in Mirpurkhas district and Laar in Thatta district, have been non-functional since last year’s rains.
The Sindh government, after consulting representatives of growers, PSMA and agriculture department officials, had fixed Nov 1 as the deadline by which all sugar mills were to start crushing but none complied with it.
Only 16 mills started crushing till Dec 4 and others followed them at their will.
Former PSMA chairman Wajid Arain claimed that the PSMA did not opt for litigation over cane price because it would have gained little by it. The association should have challenged it prior to fixation of price, he said.
Mehmood Nawaz Shah, general secretary of the Sindh Abadgar Board, said the board had informed the government time and again that mills could easily pay Rs172 per 40 kg.
The association was dragging its feet over the issue only to delay crushing in order to get more concessions from the government and keep growers under pressure to force them to supply cane at less price, he said.
“Mills not only extract sugar from the cane but also the exportable commodity of molasses. With the dollar rate on the rise, the millers are bound to earn windfall profits. Molasses is used in alcohol and ethanol and its price keeps rising,” he said.
Mr Shah said the millers did not share their cost of per kg sugar production whereas the growers’ cost of per acre production could be assessed easily.
Farmers’ representatives claimed that the supply of sugarcane was on the decline because of less production this year.
There were reports of less per acre yield in areas of Matiari and Tando Allahyar, which was the reason behind a short supply of cane to mills, said Mr Shah.
He proposed that the millers concentrate more on research than on expending their energies on squabbling with farmers. “We should jointly work on research to help bring out new varieties with higher per acre yield potential,” he said.
There are reports that some sugar mills in lower Sindh region pay very low prices and make deductions from the sugarcane’s supply on the pretext that certain varieties like Nia98, 4265, basi/disco are not approved by the government.
Sindh Chamber of Agriculture general secretary Nabi Bux Sathio said that 90 per cent of these varieties were no more sown by farmers and only some 10 per cent were grown in Thatta, Badin and Tando Mohammad Khan districts.
“This year, sugar mills in lower Sindh region are not buying SP240, which was introduced by Faran sugar mill. Even when the mills do buy the variety they deduct almost half from the total weight, saying the SP240 is a late maturing variety and they would buy it in February when it gets fully matured,” he said.
He said that according to his assessment, sugarcane production this year was 30 per cent less than last year’s and disputed the agriculture department’s claim about 22 per cent likely increase in cane production this year.
“The department relies on figures provided by sugar factories which do not share correct figures particularly when the cane is in short supply because they do not want farmers to bargain with them over the price,” he said.
Former PSMA chairman Wajid Arain who runs a sugar mill in upper Sindh region did not agree that cane was in short supply. Brief hiccups in supply of cane did not mean there was a shortage of sugarcane, he added.
If recovery of sugar from the cane was more than the benchmark of 8.7 per cent per 100kg, then the millers were bound to pay quality premium to farmers at a certain rate.
The millers and growers have been engaged in a legal battle over the quality premium issue at the apex court where millers have appealed against Sindh government’s decision in favour of farmers.