KARACHI, Oct 4: The Pakistan Sugar Mills Association (Sindh zone) has strongly criticized the Sindh government decision to fix minimum sugarcane price at Rs40 per 40 kg for the season 2004-05.

The association pointed out that a similar issue was confronted by sugar mills in the province last year, but after strong deliberations with the officials the Sindh government candidly revised downward the minimum price of sugarcane to Rs41 per 40 kg for the season 2003-04.

The PSMA further pointed out that it was also agreed that the minimum price in Sindh would be Re1 above the minimum sugarcane price of Punjab and NWFP zones. "However, so far both these zones have not notified their minimum sugarcane prices," it added.

The PSMA Sindh zone said that in the past and up to 1996-97, the difference in minimum price between Sindh and other zones was 25 paisa per 40 kg and not between Rs2 and Rs3.

Therefore, the Sindh sugar industry cannot absorb recurring huge losses arising by disparity in the sugarcane price structure. The minimum price at Rs43 per 40 kg notified by the Sindh government, assessed by any parameter, was absolutely uneconomical and, as such, unbearable.

The association further pointed out that Sindh, which produced about 30 per cent of the aggregate national sugar production, should not be treated differently and left in isolation by lifting sugarcane price higher than other zones.

Sugar has wider national market for finding its price level. The segment rolling out 30 per cent of national aggregate sugar needs to be driven by different parameters relating to fixing of minimum sugarcane price.

Consequently, the situation was bound to inflict huge losses to the Sindh sugar industry due to a high cost of production and longer period of holding stocks on being uncompetitive in sugar production cost viz-a-viz its sale price, the association added. The Sindh sugar industry would not have timely liquidity and cash flow to pay cane growers, the APSMA-Sindh zone maintained.