HYDERABAD: Most sugar mill owners have suspended the crushing of sugar cane over the past 24 hours in Sindh, jeopardising the crushing season once again.

Uncertainty had already been looming large over the sugar cane sector as farmers kept claiming that they had been told by factory managements not to harvest the crop.

Growers like Sindh Chamber of Agriculture (SCA) general secretary Zahid Bhurgari claimed that half of the mills that had started crushing had stopped the process and Pakistan Sugar Mills Association (PSMA) Sindh chapter chairman Dr Tara Chand also confirmed that “12 mills have closed operations, thus suspending sugar cane crushing”.

“Mills are there to crush sugar cane but when there is no cane, mills perforce stop crushing,” argued Dr Tara Chand while mentioning that Shah Murad, Sindh Abadgar, Tando Allahyar, Chambar, Mehran, Matiari, Mirpurkhas, Digri, Tharparkar, Al-Abbas and Ansari sugar mills had suspended crushing.

Reports said that a meeting of millers and sugar cane growers had been convened by Sindh cane commissioner Javed Sibghatullah Mahar to discuss the situation arising out of suspension of crushing.

Growers’ leaders like Mehmood Nawaz Shah, who is vice president Sindh Abadgar Board (SAB), consider it an “orchestrated campaign” to pressurise sugar cane growers and said that farmers had been repeatedly told by millers to stop harvesting the crop as they would crush only that crop that had arrived at their backyard. “Even otherwise it looks unlawful because there is a procedure to it if a mill owner wants to suspend sugar cane crushing and this perhaps has not been followed,” he said.

In 2017-18 season, 20.611 million tonne sugar cane was produced against the target of 19m, eight per cent over the target. But in the last season (2018-19), 16.691m tonne was produced against the target of 18.752m, short by 11pc. The crop was 19pc short in terms of achievement in 2018-19 over the 2017-18 season.

Perpetual problems

Drop in sugar cane production last year was attributable to every year’s bickering between growers and miller over payment of sugar cane rate and belated start of crushing season by sugar millers. “Sugar cane producers are now losing interest in sugar cane crop because of these problems which look unending,” commented a grower.

This year crop sowing target was revised downward by the agriculture department in view of three years’ mean production of sugar cane in Sindh. Against sowing target for 310,000ha in 2019-20, 287,118ha had been brought under sugar cane acreage so far which is 92.6pc of target. The production target is fixed at 18.338m tonne.

Sugar millers, rightly or wrongly, had been complaining about non-supplies of crop by farmers and had informed the Sindh cane commissioner about the situation. The PSMA has not yet officially asked its members to close crushing, but its chairman said that it had been left to each mill’s discretion to continue crushing or otherwise in view of supplies of sugar cane.

Artificial crisis?

Growers feel millers have once again jeopardised the entire sugar cane season to protect their interests. They believe that millers wanted to create a situation in market that benefits them as cost of sugar increases on the one hand and farmers get panicked on the other. “Once growers get panicked, [they] supply sugar cane at lesser price in view of approaching wheat harvesting,” said SAB leader Shah.

Dr Tara explained that he himself had been facing no-cane situation in his Abadgar Sugar Mills of Tando Mohammad Khan. “Hardly 20,000 tonnes of cane was available in mills backyard. Even after closing mills, we have to bear losses considering numerous expenses of labour, etc,” he said.

He blamed farmers for not supplying sugar cane at Rs192/40kg — notified by the Sindh government in November. “There is no point in denying notified rate [to growers] as we adhere to government’s notification. We are telling the government, cane commissioner and farmers to ensure supply of cane and get Rs192/40kg cash for every maund of crop,” he said.

Sindh has 38 sugar mills and of them around four are closed for the past three years. Over two dozen mills were said to have started crushing sugar cane and according to SCA general secretary Zahid Bhurgari, almost half of sugar mills that had started crushing have suspended their operation till Thursday.

“If any mill gets 30pc to 40pc of its required sugar cane supplies, it won’t be opting for closing crushing,” said Dr Tara. “For how long mills will wait for supply of sugar cane [to pick momentum] as [without] supplies it is difficult to continue the process,” he remarked. He believed that the present situation had arisen ever since mills reduced payments from Rs230/40kg to officially fixed price of Rs192/40kg. “Some growers feel Rs250/40kg be paid or even Rs300,” he said.

Out of 38, majority of sugar mills are located in lower Sindh region. When mills started this season’s crushing, they started paying Rs220/40kg to Rs240/40kg before reducing it to notified price of Rs192/40kg. Growers decided to hold up supplies of sugar cane after sudden decline in rate and they also wanted millers to increase the rate.

Nawaz Shah contended growers could not guarantee supplies in line with crushing capacity of each mills.

“Since mills were comfortable with Rs192/40kg that’s why it was notified by the government ‘on their whims’, otherwise for growers it was still unjustified,” he said.

He also said that given raise in sugar’s price, this cost appreciation was not seen in sugar cane’s rate, he said. He conceded that arrival of sugar cane had slowed, but that did not mean that mills should close crushing. Supplies gradually become sustainable, but millers wanted to disturb the entire regime, he said.

Shah believes that millers had been looking for a way to close crushing to pressurise growers through such tactics. “Sugar millers want to squeeze crushing season because once they close mills for some time, it will cause uncertainty in sugar market and price of sweetener will jack up,” he said.

Published in Dawn, December 20th, 2019