Wednesday October 27, 2021

Confusion, claims, counterclaims blur sugar outlook for 2021/22

October 14, 2021

LAHORE: Confusion, claims, counterclaims have blurred sugar outlook for 2021-22 just a few weeks ahead of crushing season launching, which may not be a good omen for the inflation-hit consumers.

Whether it is size of the crop, expected sugar production and a likely downward trend in price of commodity, there are many guesswork by the stakeholders which may add to the already volatile sugar market. It seems that there is no much buzzword humming around like ‘the bumper crop of sugarcane’, not even by ministry of National Food Security.

The 17 percent jump in production estimates against official target of sugarcane is not being seen as an achievement as hardly officials touting it as an accomplishment.

In the last meeting of Federal Committee on Agriculture (FCA) on October 7, 2021, it was informed that sugarcane production for 2021-22 was estimated at 87.67 million tons.

However, Jamshed Iqbal Cheema, Prime Minister’s Special Assistant on Agriculture claimed this week that sugarcane production would exceed 100 million tons. He did not cite any reference to such a huge upward revision of the previous sugarcane production estimate within a short span of a week.

He also claimed that record nine million tons of sugar production has been estimated during marketing year 2021-22, which would be enough to meet one-and-half year of consumption requirement. This figure is far more than the estimation of 7.0 million tons of sugar production in the upcoming season. The annual sugar requirement of the country has been pegged at 6.2 million tons.

Pakistan Sugar Mills Association (PSMA) on the other hand estimated 5.8-5.9 million tons of sugar production on the back of about 75-77 million tones sugarcane production in the coming season.

Chaudhry Zaka Ashraf, central chairman PSMA, expressed astonishment over huge difference in sugarcane production estimates of ministry of Food Security and SAPM on Agriculture for 2021-22 season.

He observed such state of affairs is self-explnatory, saying far-sighted approach of officials would be catastrophic for the agriculture sector.

Ashraf also called for starting sugarcane crushing season in the last week of November, in line with the provision of rules and regulations, saying high sugar recovery could only be made possible following maturity of crop.

Otherwise, he warned, sugar production could be reduced significantly if government forced to start crushing season from November 1.

He also claimed that timely wheat sowing has no direct connection with early harvesting of sugarcane crop.

Nonetheless, such a big difference of opinion and disparity in key data of sugar sector is certainly not a good omen for the consumers as they are at receiving end since last year due to major discrepancy in sugarcane and sugar production.

Last year, against the 76 million tons of sugarcane production, sugar manufacturing could be recorded merely at low as 5.7 million tons, showing just 7.5 percent sugar recovery.

On the hand, Jamshed Cheema, SAPM on Agriculture insisted that the sugarcane crushing season will start from November 1 in order to ensure smooth supply of sugar as well as timely sowing of wheat crop, citing a decision taken by the government.

Early launching of crushing season would also help in avoiding further import of sugar in the country. The government also anticipated that sugar prices would start to decrease from November onward and may trade below Rs80/kilogram, he observed.

However, when contacted, a senior official of Punjab Food Department said there is no decision taken yet by the government about commencement of sugarcane crushing season from November 1. He hinted that crushing may initiate on November 10 instead.

Farmer representatives, however, surely want to start sugarcane season early with a view to sell their produce timely so that they can sow wheat crop on time.

Ibrahim Mughal, chairman Agri-Forum Pakistan said running of sugar mills in November means farmers would get ample time for early planting of strategic wheat crop.

He was of the view that delay in sugarcane crushing season almost every year irked farmers on various counts as powerful sugar mill owners used it as a leverage for forcing government to accept their demands as well as to influence sugarcane price in their favour.

Last year, provincial government asked mills to start sugarcane crushing season in the first week of November but had to face stiff resistance of sugar mill owners. Millers agreed to start crushing by November 10, but after a few weeks, they abruptly closed down operation for a few days in a bid to reduce sugarcane price.

For the last several years, farmers have to suffer a loss of billions due to delayed launching of sugarcane crushing season by sugar mill owners. According to Mughal, since sugarcane is a delicate perishable commodity, it must be bought in for processing in a timely manner after the harvest. Owing to unwarranted delay in reaping of sugarcane due to late start of crushing season, farmers face serious problem of reduction in weight of produce due to moisture loss. More importantly, Mughal revealed that sugar mill owners don’t want a reduction in area under sugarcane production as they delayed crushing which left farmers with no option but to continue cultivate sugarcane for next season instead of sowing vital wheat crop.