LAHORE, Jan 24: The Pakistan Sugar Mills Association (PSMA) on Thursday demanded decrease in cane procurement price in Punjab as well after reduction of Rs4 per 40kg — from Rs67 to Rs63 - in the sugarcane support price in Sindh.

In a press statement, the association said sugar contents in cane was much lower in Punjab than in Sindh and the frost attack in Punjab had further reduced the sucrose content.

For the last two crushing seasons, the sugar industry in Punjab is suffering heavy losses owing to low sugar price. The Punjab government has raised the minimum support price from Rs45 to Rs60 per 40kg, an increase of 33.3 per cent.

On top of it, the federal government has imposed one per cent federal excise duty on producing sugar in addition to 15 per cent sales tax already being borne by the sugar mills in Punjab.

It said a letter had been sent to the Punjab Cane Commissioner asking for the revision and reduction of Rs9 per 40kg in the minimum support price of the cane.

Detailing the break-up of the price reduction suggestion, it said Rs4 was in line with the support price reduction in Sindh, while a decrease of Rs5 was due to the negative effect of the frost attack.

It said the sugar industry in Punjab was suffering losses to the tune of Rs1 million to Rs1.2 million daily on account of massive drop of sugar contents.

The industry, it said, would be left with no option but to close down mills because of uneconomical crushing in case the price was not reduced accordingly.

It said the price of sugar, due to excess availability in the market, was sustaining at lower level.

At the start of crushing season, the federal government had assured the sugar mills that ex-mill sugar price would be maintained at Rs29.50 per kg. But soon after beginning of the crushing season, the previous government started dumping surplus imported Indian sugar in the market by subsidising prices.

The last sold price of sugar at which the government off-loaded sugar was around Rs18 per kg which the Trading Corporation of Pakistan (TCP) had imported at Rs40 per kg about two years ago.

The government subsidised import by Rs15 billion which played havoc with the sugar industry’s business and its economics, it said.