Non-payment to growers, sugar’s high prices: Two millers arrested in a rare move

Published October 16, 2021
Trucks transporting sugarcane are seen in this file photo. — Reuters
Trucks transporting sugarcane are seen in this file photo. — Reuters

LAHORE: Condemning arrest of two sugar millers for allegedly defaulting on payments to growers, the Pakistan Sugar Mills Association (PSMA) has urged the government to sit with them for resolving issues instead of taking extreme steps that humiliate investors.

PSMA Chairman Zaka Ashraf told a press conference here on Friday that two millers were taken into custody on Thursday night for default on a petty amount for the first time in the history of the country.

Condemning the measure, he asked the government to hold a dialogue for resolving all issues instead of going for humiliation of those who had invested billions of rupees in the local industry.

He said efforts of the industry to meet top officials recently had remained unsuccessful.

Don’t humiliate investors, PSMA tells govt

He would not clarify industry’s reaction if the government forced it to start crushing season earlier like the last year.

“We don’t want confrontation with the government. A decision on the crushing season and cane price will be taken at an appropriate time.”

He said an increase in cane price had warranted a proportionate increase in the sugar rate for the cane price was 80 per cent of the sweetener cost.

“The premature start of crushing last year had caused a major loss in sugar output, leading to a shortage of the commodity in the local market.

Same elements are active again to begin the crushing season ahead of its stipulated time,” he added.

He said the sugarcane acreage was on the increase only because the growers were being paid more than the rate fixed by the government.

“On an average the cane price remained Rs270 per 40kg against the official rate of Rs200 per 40kg.”

Mr Ashraf claimed the present cost of production of sugar is Rs104 per kilo and regretted that the government was failing to hire a third party as per PSMA demand for ascertaining the exact cost of production.

He said the government was importing substandard sugar at much higher rates.

“Government officials are persuading farmers through social media to make jaggery (gur),” the PSMA chief complained, arguing jaggery-making was an unregistered industry which paid no taxes, while a big amount of the product was smuggled to neighbouring countries.

The sugar millers were also irked by Rs40 billion fines imposed by the Competition Commission of Pakistan, Rs5 million per day fine for delaying crushing season, and registering cases against them for failing to pay growers within 15 days of purchase of cane.

Mr Ashraf said the Punjab government was not giving NoC to the mills that had cleared farmers’ dues and banks were reluctant to issue them working capital in the absence of NoC.

Earlier, the Punjab government initiated action against the sugar mills for committing violation of law and registered cases against the owners and management of three mills — Chanar Sugar Mills, Faisalabad, Shakarganj Sugar Mills, Jhang, and Pasrur Sugar Mills, Gujranwala.

Chanar Sugar Mills owner Javed Kayani, Shakarganj Sugar Mills owner Pervez Ahmed, General Manager (Cane) Manzoor Hussain Malik and General Manager (Admin) Hussain Malik have been arrested while police were conducting raids to nab the owners of Pasrur Sugar Mills.

Chief Secretary Kamran Ali Afzal said violators of the law would be dealt with an iron hand. He said strict action would be taken in case of sale of sugar at more than the fixed price and nobody would be allowed to sell the sweetener higher than the ex-mill rate of Rs84.75 and retail price of Rs89.75 per kg.

Published in Dawn, October 16th, 2021

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