KARACHI, July 29: The Sindh ministry of industries has received about seven applications for setting up new sugar mills in the province. Five of them are from districts Ghotki and Naushahro Feroze.

The establishment of new sugar mills in the province is banned since 1991 due to shortage of sugarcane, which resulted in a worst supply crisis sending cane prices to an abnormal height amidst complaints from growers about inadequate and delayed payment from the mill owners.

Industries ministry sources are tight-lipped about the fate of these applications for new mills only stating that a summary has been sent to the chief minister who will decide on each case on merit. The applications are pending with the ministry since May.

When asked as to why the ministry accepted the applications when there was a ban, they said the government might grant an application depending on the circumstances prevailing in a particular district with regard to the availability of sugarcane in abundance.

Market analysts, however, believe that the government may allow new players in the field to break the existing cartel of mill owners who, the government feels, had a major hand in the worst sugar crisis recently, forcing the government to import the commodity at the cost of huge foreign exchange when there were enough stocks of sugar allegedly hoarded by the mill owners.

At present there are 32 sugar mills in the province, including three or four rendered sick. The analysts are of the view that the government may consider these applications sympathetically, as the process of industrialisation in the province came to a halt as no major industry was set up in the interior during the last 15 years.

They say investors from Karachi are reluctant to set up industries in the interior because of bad law and order situation, while the local people having resources do not opt for any other industry except sugar mills consuming raw material available on hand.

Most of the applicants are growers who claim that there is abundance sugarcane in their districts which is presently transported to sugar mills in other districts. “The people in the districts have the first right over their produce,” they added.

Sardar Muhammad Usman Almani, a leading grower of district Naushahro Feroze, who is also an applicant, told Dawn on Saturday that the cane cultivated area in his district was 58,000 acres against the 15,000 acres projected by the government.

He said there was no shortage of sugarcane in the province which was evident from the fact that most of the mills in the province were violating their sanctioned production limits and collecting massive stocks of sugarcane in NLC trucks especially acquired for the purpose from as far as 70km from their mills.

Mr Almani intends to set up a small compact sugar mill instead of a big one in Naushahro Feroze at an estimated cost of Rs150-180 million. A small mill will not only consume less sugarcane but also save a lot of overhead expenditures.

He claimed that the experience of setting up small compact sugar mills on cooperative farming basis had been very successful in Punjab and the same exercise would be beneficial for Sindh, ushering prosperity by creating jobs for the local people.

Mr Almani said further that the province had great potential for sugar production compared to Punjab, as the percentage of sucrose recovery in the former (10-12 per cent) is higher than 7.5 per cent in the latter. The mill owners are reluctant to reveal exact amount of sucrose recovery to avoid payment of premium to the growers.