KARACHI: The sugar industry has urged the government to fix sugarcane price in tandem with the selling price of sugar and asked for early payment of outstanding subsidies to come out of the woods.

According to industry sources, around 89 sugar mills — located in Sindh and Punjab — are reluctant to start new crushing season citing liquidity crunch due to an outstanding amount of Rs16 billion export subsidies from the government and low prices in domestic market.

In addition to that, the industry has also demanded the Federal Board of Revenue (FBR) to collect general sales tax (GST) on actual selling price of sugar instead of Rs60 per kg fixed by the board.

Chairman Mehran Sugar Mills Mohammad Kasim Hasham told Dawn that industry also wants the government to allow unconditional sugar exports. He said that prescribed conditions cause export delays and changes in international prices.

The Pakistan Sugar Mills Association has already rejected prices fixed by the provincial governments for procurement of sugarcane — Rs180 and Rs182 per maund for Punjab and Sindh respectively.

Punjab’s sugar millers are also unwilling to begin crushing at the price fixed by provincial government at Rs180 per 40kg, the sources added.

The Sindh government is yet to officially announce sugarcane prices for the new crushing season starting from November 15, however it has directed Sugarcane Commissioner to ensure that cane price for procurement would be Rs182 per 40kg, Mohammad Kasim Hasham added.

He regretted that government ignored sugar millers or its representative body while taking decisions regarding the industry.

Mr Kasim was apprehensive about less cane production this season in Sindh and added that with no rains and shortage of irrigation water, the production is likely to be 30pc less than the previous season.

The sugar industry in Sindh is also at standstill and so far only one sugar mill has started crushing but it is paying only Rs140 per maund to cane growers. There is a greater possibility that sugar production in 2018-19 is likely to be less than last year when production stood at 8.5 million tonnes, he maintained.

Published in Dawn, November 11th, 2018