HYDERABAD: Most sugar mills have completed crushing of sugar cane and rest are nearing closure.

Sugar millers have lately lost their case against Sindh government’s notification fixing cane procurement price at Rs250 per 40kg for the 2021-22 season.

Millers had filed a joint petition against the notification but Sindh High Court’s single judge bench rejected the petition, upholding the notification.

Mostly mills continued the cane crushing process without any major issue over price controversy this year when compared with past seasons. Previously, they had suspended the process pleading that they were facing ‘no cane’ situation.

The crushing season in lower Sindh begins by November and usually the Matiari Sugar Mills takes lead in commencement of crushing by lighting up their boilers first.

This time around, cane procurement process continued smoothly

Sugar cane producers claim that on an average Rs250 per kilo was paid by sugar mills this year although the rate over and above the notified one was also recorded in different areas.

Around 32 out of 38 sugar mills had crushed cane in Sindh. At present, six or seven mills are busy crushing. Sugar cane rate of Rs202 was fixed by Sindh government for the 2020-21 season.

“Hardly 5pc cane may be available for crushing now as the season is drawing to a close,” says Sindh Abadgar Board (SAB) vice president Mehmood Nawaz Shah. He said mills this year did not suspend crushing although they did make an attempt to get the price notification revised downward. But they lost their case, he pointed out.

Crop production

Sugar cane crop is grown on around 280,000ha across Sindh. Cultivation of the crop had been witnessing ups and downs over the last few years. Millers delay crushing arguing that they could not start the process because the crop was not ready for harvesting. Grower dispute their claim, saying that the crop had always been ready for harvesting and crushing in October but millers intentionally wanted to cause panic among farmers so that they could exploit situation by paying less to farmers.

“Initially, a rate of Rs300 and even Rs360 per 40kg was paid by millers till Jan 10, 2022 this season against Sindh government’s notified rate of Rs250. But onwards the rate was decreased as millers paid only Rs250,” said Nabi Bux Sathio, the Sindh Chamber of Agriculture vice president. Nadeem Shah, a Matiari-based cane grower, also subscribed to Sathio’s claim and mentioned that he got an average price of Rs280 this year. He supplied cane to Matiari, Army, Abadgar and Shah Murad sugar mills.

Sathio, however, contended mills’ cartelisation policy that deprives growers a fair price of their crop. “Growers can’t hold their crop in the fields beyond mid-February due to temperature variation and factor of water flows availability and this enables millers to exploit farmers,” he observed.

Sugar rate in Ramazan

According to him, sweetener’s rate would increase in the holy month of Ramazan. “Sugar was available for Rs85 a kilo in retail market and I think this price will now hover around Rs90 a kilo in the days to come,” he said.

In retail market, sweetener’s price varied also. According to a trader, Sikandar Rajput, he got a 50kg bag of sugar (Ansari sugar mills) for Rs3,920 (wholesale rate) while another bag (of Matiari sugar mills) was purchased for Rs4,300. This takes wholesale price of sweetener to Rs78.40 and Rs86 a kilo in wholesale and retail market, respectively. “The price trend shows that retail market may show an increase in the sugar price in Ramazan,” he feared.

A Matiari sugar mills representative, Dost Mohammad Baloch, said that above-mentioned difference was surprising otherwise Re1 or Rs2 difference was understandable. “We, however, cherish quality of sweetener the most at our plant,” he said.

Premium issue

SAB leader believed that millers perhaps intended to get some favour through court by filing this petition in order to tackle the quality premium issue of growers. “Had the Sindh High Court revised the price notification downward for this year, the millers would have adjusted the rate paid over and above the notified one towards past liabilities including those of quality premium,” Mr Mehmood asserted.

He said that there were cases in last crushing season where mills issued cane purchase receipt (CPR) with a note that price over and above notified rate would be adjusted towards past and present liabilities.

Sindh’s millers owe a whopping over Rs44bn — assessed for 1998-99 to 2018-19 periods two years back by Sindh cane commissioner’s office for submission before SHC — to sugarcane growers of Sindh after millers lost their appeal in apex court against judgement of Sindh High Court in favour of sugarcane growers, requiring millers to pay quality premium to growers.

Payment of quality premium gets due when sucrose recovery crosses benchmark in any mills of Sindh. Sindh’s benchmark for sucrose recovery is 8.7pc which is determined on overall sugar recovery basis of each mills.

In Sindh, the premium is paid on each 0.1pc of sucrose above 8.7pc benchmark at the rate of 50 paisa per 40kg. The millers had challenged SHC’s verdict in Supreme Court in late 90s but eventually lost the appeal in March 2018. Since then quality premium’s dues have been accumulating.

Published in Dawn, March 27th, 2022