HYDERABAD: Sindh’s sugar millers, who are otherwise in the habit of waiting out official date of cane crushing, have started crushing this year well before the notified date to cash in on favourable market conditions but they are not ready to pay quality premium to growers on sucrose recovery even five years after the Supreme Court’s judgement.

Fifteen sugar factories have commenced crushing for 2023-24 season and many have started crushing even before the officially notified date for cane crushing. Matiari sugar mills, as usual, took the lead in starting the crushing on Oct 27 followed by others.

As per official figures, 16,789,161.093 tonnes of cane was crushed and 1,744,808.150 tonnes of sugar was produced last season with 10.157pc average sucrose recovery. A total of 22,277,208.12 metric tonnes of crop was crushed and 2,291,466.750 tonnes of sugar was produced with average sucrose recovery of 10.283pc in 2021-22. Thirty-two mills had participated in the crushing.

Sugar recovery benchmark for Sindh’s sugar cane is 8.7pc and for each 0.1pc of sugar recovery the mills are to pay at a rate of 50 paisa per 40kg over and above the price officially notified as quality premium but the issue has been lingering on decades. Sindh’s growers had won the case for quality premium after prolonged legal battle in Sindh High Court and Supreme Court but their verdicts remain unimplemented.

Dues accumulated to Rs44bn, says cane commissioner; crushing process this year started by many mills ahead of schedule

The millers had lost their cases both in Sindh High Court and the apex court, which upheld the SHC verdict passed on the joint petition of Sindh Abadgar Board and Sindh Chamber of Agriculture, respectively, headed by late Abdul Majeed Nizamani and late Syed Qamaruzzaman Shah. SAB had contested the millers’ appeal in SC alone.

Rs44bn dues till 2020

Sindh Cane Commissioner’s office had assessed Rs44bn as the premium outstanding till 2020 against sugar millers, from 1998-99 to 2018-19 seasons. The amount was calculated in line with SHC’s Dec 19, 2019, order passed on identical petitions filed by Sindh Abadgar Board and Sindh Abadgar Ittehad, seeking implementation of SC’s March 5, 2018 order.

“The millers demand each year’s record of crop procurement from growers despite the fact that sugar mills are public listed companies and they must have their record for their own verification. Instead of asking growers to produce it they should refer to their own record on the cane’s price,” said SAB president Mahmood Nawaz Shah.

Through its March 5 order the apex court rejected the millers’ appeal against SHC’s March 22, 2003, order and upheld Sindh-based growers’ case on quality premium.

The super wealthy millers’ body, Pakistan Sugar Millers Association (PSMA), has been arguing all along that quality premium could not be paid as the mills were paying the cane price over and above the notified rate to farmers every year.

“It has been the millers’ position that if we are paying a price which is over and above the notified price then it should be adjusted towards the quality premium,” said Dost Mohammad Baloch, senior management representative of Matiari Sugar Mills.

“It seems we are still fighting the case for payment of premium. Our legitimate right has not yet been enforced,” complained Nabi Bux Sathio, Hyderabad-based Sindh Chamber of Agriculture’s vice president.

Sathio and his elder brother Allah Rakhio were fighting the case for the payment of quality premium against a factory in their area, which had procured sugar cane from their farmland.

The Sindh government has notified Rs425 per 40 kg indicative price of sugar cane for 2023-24 season, with an increase of 41pc over last year’s rate of Rs302 and 70pc over 2021 price of Rs250.

The crushing season has started formally from November and 15 mills have begun the crushing while others are in the process of lighting up their boilers.

The sugar cane acreage has reportedly registered a decline of 9.19pc in 2023-24 season as the crop has been cultivated on 281.512 hectares against a target of 310,000ha set by Sindh agriculture department.

The department has attributed the decline to 2022 rains and announcement of subsidy for wheat growers. So, the farmers opted for wheat cultivation and thus led to shrinkage of the cane acreage, said agriculture department officials.

Millers capitalise on market conditions

“The sugar millers are getting ex-mill Rs120 plus the rate so they started crushing well before the official crushing date of Nov 15. Two mills had begun crushing even earlier in October’s last week and two in November’s first week,” said Zubair Talpur, SAI leader.

Talpur thinks sugar mills are trying to cash in on the present market conditions. “But it will be beneficial for our wheat’s crop cultivation too. Growers will be sowing wheat on time and have a better grain harvest next year to benefit the country and our province,” he contended.

He stressed that quality premium must be paid to growers. “We will fight it out again to get this legitimate payment from millers if they refuse to pay it,” he insisted.

Published in Dawn, November 20th, 2023