KARACHI: The influential sugar industry is attempting to align bagasse prices, a residue of sugarcane, with coal prices in order to increase them by five to eight times the prevailing value, sources said on Monday.”
Bagasse is used as biofuel at the industrial level. Due to the increasing high cost of thermal energy and significant taxes on it, various options are being explored in Pakistan to reduce energy costs.
However, sources said that a new initiative to increase bagasse prices by linking them with coal prices, leveraging influence in power corridors, is taking shape.
Sources said that the current price of bagasse in the local market ranges from Rs5,000 to Rs8,000 per tonne, depending on the quality of the product. With bagasse prices linked to coal, the price could rise to around Rs40,000 per tonne.
The current coal price is about Rs45,000 per tonne. The market mechanism of coal supply is also tricky and a monopoly on the imported coal has been reported in the media.
Sugarcane is cultivated on an area of 1.22 million hectares, with a total production of 73.40 million tonnes. Sugarcane’s role has been limited to sugar production in the past; however, it can play a significant role towards the energy matrix of the country.
The sugarcane sector can serve for bioelectricity production in Pakistan.
According to a research report, the country has the potential to generate approximately 3,000MW of electricity from sugarcane. Various economic incentives have been offered to power-producing sugar mills.
Sources said that if bagasse prices are brought at par with coal prices, the possibility for obtaining cheaper energy for the industry will be further reduced.
The country is already suffering huge losses due to the high cost of energy.
Published in Dawn, May 14th, 2024
