HYDERABAD: An officer of the Matiari Sugar Mills management has cautioned the Sindh government that sugar mills could go for suspending cane crushing if the cane price was fixed at Rs300 per 40kg or so in Sindh, like Punjab did, for the 2022-23 season.

He said that sugar cane price of Rs250 was being paid to growers considering present percentage of sugar recovery. Speaking at a press conference at the local press club on Sunday, Dost Mohammad Baloch, resident director of Matiari Sugar Mills, said that sugar stocks in the country were available to meet domestic requirement till Jan 15.

He said that Matiari sugar mills had commenced crushing early, on Nov 11, because sugar cane crop was damaged in floods and remainder of crop should be procured to enable farmers to keep their economy going.

He said several sugar mills in Sindh had now started cane crushing although no announcement about minimum sugarcane by Sindh government and mills decided to pay last year’s rate of Rs250 per 40kg. He said the mills management had already told growers that it could not pay over Rs250 to them depending on present percentage of sugar recovery, i.e. 8.5pc. He said such a statement had been sent to the Sindh Cane Commissioner as well. He said that it was learnt that Punjab government had fixed Rs300 per 40kg although notification was not issued. But, he said, sugar mills feared Sindh government would fix an identical price too. He said that mills did not object that farmers should not get better sugarcane price.

Sugar industry is in crisis, says Matiari mills’ management

The officer argued that present condition of crushing indicated that if minimum procurement price of Rs250 per 40kg was paid to growers the factories would bear the per kilo cost of sugarcane at Rs75 with 8.5pc sugar recovery. If Rs300 per 40kg rate is notified and recovery remained 8.5pc, then per kilo sugar cane procurement price would be Rs88 per kilo. He cautioned that if such a higher rate was notified by government then sugar factories could suspend cane crushing in view of unfavourable market conditions.

Answering a question he said that Sindh’s sugar factories had exportable surplus and according to international market price sweetener’s rate should be Rs115 per kilo. He said that Pakistan Sugar Mills Association (PSMA) was rightly pressing government to allow it to export surplus sugar without seeking any rebate on it.

He termed Punjab government’s decision of Rs300 per 40kg sugarcane price ‘political one’ and said it was made without taking into account economics of situation. “When no flour crisis takes place if its price is raised, then how could there be a sugar crisis if sweetener’s price is increased,” he argued. He said government felt that sugar export would lead to a crisis thus it was under some psychological pressure.

He agreed with a questioner that Sindh had double the number of sugar mills when compared with sugar’s requirement of the province. He said PSMA demanded subsidy only when prices showed a declining trend in international market. He said that Sindh’s sugar industry was facing a crisis. He said that it was Sindh where millers were required to pay quality premium.

Published in Dawn, November 21st, 2022