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Thursday March 28, 2024

Crushing begins without fixing sugarcane price

By our correspondents
November 28, 2015
LAHORE: Sugarcane crushing has started across the country but the provincial governments of Punjab and Sindh have yet to fix its minimum purchase price, leaving the growers at the mercy of sugar mills owners.
The crushing in Sindh was initiated about two weeks ago while it began last week in Punjab, but the growers are in a fix, looking for the rate of their hard work.
On the other hand, Prime Minister Nawaz Sharif, addressing a gathering a couple of days ago in Khanewal, had said that the sugarcane price should be unified across the country and suggested Rs 180 per 40kg rate for the 2015-16 crushing season.
The delay in fixing the sugarcane purchase price is actually benefiting the rulers of Sindh and Punjab as they and their families own majority of sugar mills in the two provinces. On the other hand, the failure to announce the price is causing millions of rupee loss to growers with every passing day, with the accumulated loss expected to reach the billion mark, if a decision is not made.
Historically, the sugarcane price is fixed and announced in mid-September to mid-October every year. This helps the farmers to take their cropping decisions. Sindh Agriculture Department Director (Information) Deedar Hussain Bhutto, talking to The News, said the price issue was with the chief minister as consensus did not develop between the growers and Pakistan Sugar Mills Association (PSMA) Sindh chapter at the agriculture minister-level.
“A joint meeting among the agriculture minister, growers and PSMA, and one each between the growers and the minister as well as the PSMA and the minister were held, he said. However, all the meetings were inconclusive as the growers initially demanded Rs 230 per 40kg, but the millers were not ready to increase Rs 160 per 40kg rate for the current season, he added.
After the failure to develop a consensus, the issue had taken up with Chief Minister Qaim Ali Shah, Bhutto added.“The department has been waiting for the CM’s decision for implementation,” he said.
Bhutto confirmed that crushing had begun in Sindh and the department was unaware of what price was being given to the growers. The department did not know at what price the millers were issuing Cane Purchase Receipt (CPR), he added.
Following the delay in fixing the price in Sindh, Punjab has also intentionally delayed it as well.Punjab Cane Commissioner Nasir Mehmood, talking to The News, admitted that six sugar mills in the province had started crushing while others were also in the final stage of preparation. “We have held Cane Board meetings as well, but the delay in the price announcement is only due to the Sindh government not taking any decision,” he said.
However, Nasir claimed that the government had delayed the announcement with good intention and Chief Minister Shahbaz Sharif was aware of the situation.Talking about the fiasco last year, Nasir said the Sindh and Punjab governments had fixed Rs 182 per 40kg and Rs 180 per 40kg rate respectively. However, the sugar millers of the Sindh got a decision from the Sindh High Court which reduced the minimum purchase price downwards to Rs 155 per 40kg. However, the growers challenged decision as the Supreme Court gave relief to them, he recalled.
Later, the millers of Sindh obtained a stay order from the Sindh High Court. This legal battle took four months during which the crushing season finished, he added.As the production cost of Sindh’s mills was reduced by around Rs 6 to 7 per kilogram, they dumped sugar in the Punjab market, creating a crisis for the local mills owners. As result, the sugar mills of Punjab faced severe liquidity crunch, halting growers’ payments.
The cane commissioner said due to the entire episode, the Punjab government sealed nine sugar mills to clear the growers’ payments. He added that the government would not allow any of these mills to start crushing until they cleared all the dues.
He said the delay in announcing the minimum purchase price was a good decision as the provincial government did not want any controversy or expose the Punjab-based sugar mills to a crisis directly affecting the growers.
Nasir said if Punjab fixed a sugarcane price followed by Sindh announcing a much lower rate then the sugar produced in Sindh could be dumped in Punjab yet again. “We have delayed only to avoid such situation but it is certain that the price will be fixed before Nov 30,” he said.
As per law, Nasir said, all sugar mills of Punjab had to start crushing by Nov 30 every year, adding that the Punjab government was trying to avoid any move of Sindh for manoeuvring the situation.
However, the cane commissioner was unable to answer what Punjab will get by delaying the price fixation in the province, expect exposing the growers to the millers, if the Sindh millers again get some relief through a court of law.