KARACHI, Nov 9: Sugar industry in NWFP has been pushed into a deep crisis following the announcement of sugarcane price at Rs65 per 40 kg, which is higher by Rs5 compared to other provinces.

Consequently, the industry has intimated to the Cane Commissioner in Islamabad that the mills would not be able to start crushing if no corrective measures are immediately taken.

With the cultivation of poor quality sugarcane of Indian origin having poor sucrose contents the NWFP sugar industry is in acute crisis as it would not be in a position to compete with sugar produced by mills in Sindh and Punjab.

The Punjab government has notified minimum purchase price of Rs60 per 40kg of sugarcane for the crushing season 2007-08 with the deduction of transportation charges at 40 paisa per quintal (100kg) per km from the purchase price.

The NWFP government had been for the past 15 years notifying sugarcane price in line with the province of Punjab. During the crushing season 2006-07, for the first time the price of sugarcane was fixed at Rs5 over and above the purchase price of the Punjab at Rs65.

As a result of this lopsided policy the NWFP sugar mills incurred huge losses and were carrying-over large unsold stocks as they could not compete with the Punjab sugar mills.

The government of Punjab, in order to discourage cultivation of inferior quality and diseased Indian sugarcane, imposed 5 per cent deduction from the purchase price.

In the absence of any corrective measures from the NWFP government the growers in the frontier province continued to cultivate Indian-origin cane, thereby adversely affecting sugar mills production.

The mills has urged the commissioner to direct the NWFP government to bring the cane prices at par with the Punjab province along with 5 per cent deduction for Indian cane, which has poor sucrose contents.

It was also stated that if the federal government wanted the NWFP industry to survive a 15 per cent regulatory duty on sugar exports to Afghanistan be removed forthwith.

Since the mills in the NWFP are left with huge unsold stocks and were unable to compete with other province, the federal government should arrange special financing in the form of “Qarz-e-Hasna” to the industry so that it could pay dues to the sugarcane growers.

Chairman Pakistan Sugar Mills Association (NWFP zone) Iskander M Khan was highly critical of the provincial government for adopting lopsided policies, which only take into consideration the cost incurred by the cane growers.

Whereas the industry also suffers owing to poor quality cane with less sucrose contents and is loaded with high cost of production and procurement prices, it is feared that the NWFP mills would collapse if they start crushing for the current season.

“How could you fix the price of raw material but do not cover the cost of end product to keep the industry viable and financially in prudent?” Mr Khan asked.