KARACHI, Dec 27: Pakistan Sugar Mills Association (Sindh zone) has criticized the provincial government for fixing higher sugarcane price along with quality premium.

The association has alleged that this is in defiance of Industries and Production Minister Liaquat Ali Jatoi’s price formula reached with the growers and sugar industry about two week back.

PSMA has pointed out that this is contrary to a categorical announcement of Rs43 (inclusive other costs) per 40kg of sugarcane for the crushing campaign 2002-03 in Sindh made on Dec 17 by the minister.

The government of Sindh, PSMA said, after a week-long delay announced sugarcane price at Rs43 per 40kg, loaded with quality premium at 50 paisa per 0.1 incremental sugar recovery above 8.7 per cent.

In Punjab, PSMA said, sugarcane price was flat at Rs40/40kg and no question of quality premium was there since 1995.

The coercive sugarcane price structure in Sindh has already caused huge losses to Sindh sugar industry in the past two years, pushing it to defer operations of sugarcane crushing till realistic sugarcane price was put in place.

On the intervention of the industries minister the price of Rs43 (inclusive all other costs) per 40kg of sugarcane was agreed upon by all the stakeholders and assurances were also given to initially allow export of 0.2 million tons of sugar and eventually 0.4 million tons. This would provide cost/price differential, support and other facilitations required.

But no sooner than the processing of sugarcane started in the province, the Sindh government has come out with a big blow of high sugarcane price plus quality premium, which rendered operations uneconomical, the association lamented.

PSMA (Sindh zone) further alleged that fixing of higher sugarcane price will hit the sugar industry and standing crop and also ruin the agro-based economy of the province.