ISLAMABAD, Jan 11: A high-level meeting between sugar millers and officials of the federal and provincial agriculture ministries, held here on Thursday to resolve the ongoing controversy over the sugarcane prices and threats by millers to stop crushing, ended inconclusive.

However, a technical committee, comprising representatives of sugar mills, Central Bureau of Revenue (CBR), Ministry of Finance and provincial and federal agriculture ministries was constituted for the first time for coming up with a “long-term” and permanent solution to the issue of sugarcane intervention prices that resurface every year during this season. The committee will hold a meeting on Saturday in Lahore. Sources privy to the meeting told Dawn that it was also expected that the committee would decide to leave the sugarcane prices to the market forces of “demand and supply” – a long standing demand of the Pakistan Sugar Mills Association (PSMA).

The millers are of the view that due to the intervention prices of sugarcane fixed by the government, the production cost of sugar had increased considerably while the prices of sugar in the market remained low simultaneously owing to which they were bearing heavy losses.

“The millers want the government to either fix both the sugarcane and ex-factory sugar prices at the same time or leave both to the market forces,” a source said.

The committee will also review the production cost of sugarcane, the content of sucrose level in sugarcane in different provinces and the cost of making sugar as well as Gur.

The technical committee would also suggest to the government whether duty should be levied on export of Gur to Afghanistan and the Central Asia. The demand for Gur has increased in Central Asia over the last few years where it is used in wine-making. This has led to increase in the prices of Gur, which is now being sold as high as Rs50 per kg, compared to sugar, which is being sold at Rs32 per kg at the retail market. The millers want the government either to withdraw export tax on sugar or also levy duty on the export of Gur.

In their official statements, both the government and the Pakistan Sugar Mills Association (PSMA) representatives called the meeting a “very successful” one for the long-term planning to avoid such a situation in future. But, they refused to share anything about the meeting.

Sources said during the meeting, the PSMA representatives informed the government that due to current sugarcane prices, the ex-factory price of sugar was Rs31-32 per kg. They said it was too high. Besides, the government had intervened and released the stocks through the Trading Corporation of Pakistan (TCP) to decrease the retail sugar prices, which, they said, was inflicting losses on millers.

The PSMA was also of the view that in Sindh and NWFP, farmers were not even willing to sell their sugarcane on Rs80 per 40 kg, compared to the government prices of Rs65 and Rs68 respectively, as farmers wanted to make Gur from the sugarcane.

This season, the sugarcane production has crossed 51.4 million tons compared to the target of 50million tons. This production is about 15 per cent more than the last year’s of 44.6 million tons.

An official of the Ministry of Food, Agriculture and Livestock (Minfal) told Dawn that after the meeting of the technical committee, the Agriculture Policy Institute (API) – former Agriculture Prices Commission – would hold its own meeting on Jan 23 and give vetting to the decision of the technical committee.