KARACHI, Sept 2: The Sindh government has sanctioned two new sugar mills to be set up at Ghotki and Nausharoferoze. This will take the number of mills in the province to 34, including two sick mills at Thatta and Dadu.

Sources at the ministry of industries in Karachi told Dawn on Friday that the approval for two new mills had been given out of a total seven applications filed with the government. The other applications were also being considered and a decision would be taken on merit, they added.

This is for the first time in the last 15 years that permission for setting up new mills, banned since 1992, had been given. The ban was imposed following complaints of acute shortage of sugarcane leading to brawls among the sugar mills on cane procurement and growing complaints of non-payment to the growers.

The sources pointed out that the successful applicants had been asked to submit technical details of their projects with regard to sources of financing, production capacity and employment prospects for the local people. They should also provide details of the availability of sugarcane in the area to be consumed by the new mills.

The sources maintained that the setting up of new mills would benefit growers in the area, who would be able to sell their cane crop to the new industries. It would also help them get their money stuck up with the millers who would clear the amount in the hope of ensuring fresh supplies.

Market analysts believe that the change in government's policy is aimed at breaking monopoly of the existing mill owners who were responsible for creating artificial sugar crisis recently.

The applicants for new mills had pleaded with the government that there was no shortage of sugarcane in the districts where new mills are planned. They further argued that there was no shortage of cane in the province.

“Hue and cry for an artificial shortage is raised by the millers who are operating at double capacity violating production limits set by the government. There is no limit to the mills' profitability but they are reluctant to pay the genuine price to the growers,” they added.