KARACHI, Feb 15: The Pakistan Sugar Mills Association (PSMA) has criticised the government for allowing 13 new sugar mills at a time when the existing industry was operating at 40 to 50 per cent of its installed capacity owing to poor yield and low sucrose content of sugarcane.

At a time when sugarcane production was insufficient to meet the requirements of the existing mills, the PSMA urged the government to divert this investment to power sector to cater to future electricity needs of the country, instead of overburdening the sugar industry.

In response to a statement by the minister for industries, production and special initiatives, Jahangir Khan Tareen, made in the National Assembly on Feb 14, the vice chairman of PSMA (NWFP Wing) Iskander M Khan, opposed the move to establish new mills.

The present domestic sugar consumption stands at 3.8 million tons, and it increases by around 100,000 tons per annum. As against this, the sugar industry has an installed capacity of over seven million tons which means that it was operating at 40 to 50 per cent of the crushing capacity.

Furthermore, sugarcane is being cultivated on approximately one million hectors. However, due to poor yield and low sucrose content, the cane produced is much below the requirement of the existing installed capacity which results in high ex-factory sugar prices, it was stated.

The PSMA took serious notice of reports that new mills were being installed in the sugarcane areas developed by the existing sugar mills.

It asked the government to impose a complete ban on new sugar mills, and instead divert this investment to the deficient sectors, such as power and energy.

The existing installed capacity, the PSMA claims, is sufficient to cater to the needs of the country for about 20 years.

It also demanded of the government to revise the obsolete Sugar Factories Act of 1950, and to devise an agriculture policy which could safeguard the interests of sugarcane farmers.

Moreover, steps should be taken to encourage cultivation of sugarcane, having high sucrose content and high per acre yield which presently is lowest in the world, the PSMA said.