Talks with minister on fixing of sugar cane price remain inconclusive

Updated October 19, 2019

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Sindh’s cane growers demand Rs250 per 40kg which millers are not ready to pay. — APP/File
Sindh’s cane growers demand Rs250 per 40kg which millers are not ready to pay. — APP/File

HYDERABAD: A meeting held in Karachi on Friday to decide sugar cane price for 2019-20 remained inconclusive as sugar millers appeared unwilling to pay the price being demanded by cane growers. They, however, showed their readiness to start cane crushing on Nov 15.

The meeting was chaired by Sindh Minister for Agriculture Ismail Rahu and attended by Sindh Abadgar Board (SAB) president Abdul Majeed Nizamani and general secretary Dr Zulfikar Yousfani, Sindh Chamber of Agriculture (SCA) president Qabool Khatiyan and general secretary Zahid Bhurgari and representatives of other Sindh-based growers’ bodies on the one side and Pakistan Sugar Mills Association (PSMA) Sindh zone chairman Dr Tara Chand and other sugar millers on the other side. Agriculture Secretary Agha Zaheer was also present.

It is learnt that Punjab has not yet fixed the current crop’s rate. It is likely to announce the same in the last week of the current month.

Sindh government usually fixes sugar cane price per 40kg a couple of rupees more than the rate in Punjab considering more sucrose recovery in Sindh’s crop.

Sindh’s cane growers demand Rs250 per 40kg which millers are not ready to pay arguing that they have their own constraints, like levy of general sales tax (GST) on ex-mill price of the sweetener. SCA vice president Nabi Bux Sathio citing facts and figures, that had been part of the entire sugar cane price fixation saga, rejected millers’ contentions.

Sugar millers also complained that they had not yet been paid the subsidy of Rs10.70 per kg as was announced by federal government in 2017-18 season and said the amount came to around R4.25 billion. They said the non-payment had created financial issues. In that year, Sindh government had separately paid Rs9.30 per kg on export of 20,000 tonnes of sweetener for Sindh-based sugar mills.

Growers’ representatives said that for several years, a rate of Rs182/40kg was being fixed by Sindh government whereas sweetener’s price had increased substantially. Despite that, millers were not ready to accept a fair price being demanded by them.

Millers have also been questioning Sindh government’s decision of fixing the price at Rs182/40kg. They even moved Sindh High Court last year to seek remedy.

Lower Sindh region has been home to sugar cane cultivation as several factories are located there and farmers manage the crop with difficulty as sugar cane remains a high delta crop and inadequate water flows create problems in its management.

Most sugar millers paid Rs160/40kg to cane growers for the 2018-19 crop.

It was only after a competition among millers to get more and more sugar cane stocks that factory owners started paying Rs200/40kg after passage of the first 10 days of January 2019.

“We also demand disbursement of Rs22/40kg [differential] that was denied to us in the last season when millers paid Rs160/40kg against notified price of Rs182/40kg because sugar price had increased considerably in retail market and the ex-factory rate had also gone up. Millers are morally bound to pay this differential amount to us,” Sathio said.

Published in Dawn, October 19th, 2019