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Thursday March 28, 2024

Sugar mills express concern over unfavourable working environment

By Munawar Hasan
November 14, 2020

LAHORE: The first high-level meeting between sugar industry’s stakeholders and the government last week over pricing and other issues remained inconclusive with the former expressing reservation over early start of sugarcane crushing, people in the know said on Friday.

Industry representatives expressed concern over what they called unfavorable working environment for the sugar industry where several restrictions have been placed on manufacturers.

Sugar industry feels that the steps like enforcing increased sugarcane support price and compelling mills to start crushing season from November 10 or harsh punishment coupled with capping sugar prices to certain levels would be counterproductive and against the spirit of a conducive business environment.

“By imposing such restrictions the government wants to shackle the sugar industry, which will ultimately result in closure of economic activities in this important sector,” a member of Pakistan Sugar Mills Association (PSMA) said.

Amid high prices of sweetener and farmer-manufacturer rift over payments, first high profile contact was established between government and the sugar industry. Prime Minister and central chairman of PSMA held one-on-one meeting last week, the sources said.

On November 4, they agreed to reestablish formal contacts to eliminate misunderstandings over high sugar prices and outstanding payments to sugarcane growers. The meeting was held on the request of PSMA but the PM only agreed to meet one member of the sugar industry, sources said.

Despite serious reservations over the early start of the sugarcane crushing season, industry followed directions of the government and all factories have started operations in South Punjab from November 10. Similarly, the rest of the mills in the province would function from November 15, said PSMA Chairman Zaka Ashraf.

Though the meeting was brief and remained inconclusive as far as genuinely breaking ice between the both parties who have been on warpath since the onset of this year, it is indeed a first step to establish foundation for holding further parleys.

The domestic sugar industry produces about $4 billion worth of sugar annually to meet local demand besides paying billions of rupees in taxes and creating thousands of job opportunities. Its contribution in the food and energy sectors has been an established fact and testimony to its positive role in economic growth of the industry, said Ashraf.

PSMA told the government in July about the impending shortage of sugar, which prompted import of sweetener for quelling its price hike and easing supplies.

“Industry is fully cooperating with the government despite being dubbed as a mafia,” PSMA official said. “We are part and parcel of society and would continue to work for the betterment of all stakeholders of the sugar sector.”

The government has vowed to uphold the rights of sugarcane growers at all costs besides protecting the interest of consumers. In Punjab alone, payments of more than Rs175 billion have been disbursed to sugarcane farmers and the sugar mills have been asked to make timely payments to growers. The price of sugar has also been brought down to some extent after import of sugar.