LAHORE, July 6: The Pakistan Sugar Mills Association has urged the government to build buffer stocks of 600,000 tons by purchasing sugar at the already agreed price of Rs31 per kilogram to enable the mills to clear the farmers’ dues for starting the crushing season.
Association’s Punjab zone chairman Chaudhry Zaka Ashraf and other office-bearers voiced the demand at a press conference after a hurriedly called meeting of the body here on Friday.
They said the mills were not in a position to start crushing due to heavy losses on account of low sugar prices and high sugarcane rates (minimum support price). They would be able to clear the growers’ dues, which are 80 per cent cost of producing one kilogram of sugar, only if the government purchased sugar for building the buffer stocks. The government should consider reducing the sugarcane support price from Rs60 to Rs40 per 40kg if it wanted to maintain sugar retail price at Rs31 per kg.
Earlier, Mr Ashraf apprised about the meeting of a PSMA delegation with Planning Commission secretary for power generation and Ministry of Food, Agriculture and Livestock (MINFAL) on upcoming crushing season.
He said the secretary had told the delegation that the government wanted to encourage the sugar industry to come forward and help it out in reducing electricity shortfall by generating electricity using biogas as fuel during crushing season and coal and furnace oil during off season as alternate fuel. A committee headed by Planning Commission secretary Asif Bajwa had been formed for generation of power by sugar mills, as the cabinet has approved purchase of electricity produced by the industry.
Regarding meeting with MINFAL, he said the PSMA had reminded the government of its dishonoring the commitment of ensuring sugar price of Rs31 per kg ex-mill which had shattered industry’s confidence. The government backed out from its commitment and forcibly crashed the market by off loading subsidised sugar in the open market instead of limiting it only to poor segment of society. On top of it, the government had increased minimum support price of sugarcane from Rs45 to Rs60 (33 per cent increase), and minimum wages from Rs3,000 to Rs4,000 and now 4,600 (50 per cent increase), therefore, the industry has suffered heavy losses during the last two years and was not in a position to make payments to growers, wages to employees and other business commitments.
Imposition of one per cent special federal excise duty levied on the production was also criticised by the PSMA members in the meeting as they said it had pushed the industry to a situation where it was impossible to start the next crushing season.