LAHORE: Pakistan Sugar Mills Association Punjab Chapter Chairman Javed Kayani has sought government’s help in making timely payments to growers.
In a statement on Sunday, he says since the sugar mills are obliged to crush the entire crop, it is mandatory to sell the yield for early payments to growers.
He says sugar production process spanned over four months and the yield is sold throughout the year with surplus looming price of sugar remained depressed and forced selling continues in the market to discharge liabilities to growers.
The government must ensure enforcement of the Sugarcane Act-1950 to enable producers to make payments to growers within 15 days from the date of purchase of the crop.
He says sugar sale by mills are limited according to monthly consumption of the country, forcing millers to borrow from banks, which retain a margin against pledge of the produce. “Therefore, in order to discharge liabilities to growers, it is imperative to retrieve full value of cost of production.”
He says the export parity at the moment is Rs36 against Rs60 per kg cost of production, causing a deficit of Rs24 per kg. “It is therefore impossible to make payments to sugarcane growers when the industry is not in a position to recover the cost of sugarcane.”
Kayani says the Indian government has been doling out $64 per ton export rebate on sugar besides giving Rs660 billion as interest-free loans to help and support the sugar industry to make payments to growers. It merits mentioning that the cost of production is lower in India as compared to Pakistan.
The Agriculture Policy Institute Ministry of National Food Security and Research, Islamabad, has strongly suggested to provincial governments not to increase the price of sugarcane this year, as surplus produce already exists in the country. Under the circumstances, the sugar industry is justified to seek support from the government when sugarcane prices are fixed unilaterally for political expediency without taking into account the international scenario, he says.
Published in Dawn, December 29th, 2014