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PSMA postpones crushing in Punjab on low sugar price
ISLAMABAD–The Pakistan Sugar Mills Association in an emergent
meeting has unanimously decided to postpone the
sugarcane-crushing season for indefinite period and said
that mills would not start to sugarcane crushing until
sugar prices come to a reasonable level.
“We demand the market price of sugar between Rs 24 to Rs 25
per kg which includes three rupees sales tax and the industry
only is in a position to get Rs 21 to Rs 22 per kg as now
against the present market price of Rs 19 to Rs 19.25, which
minus the sales tax, comes to Rs 16 to Rs 17,” the PSMA
(Punjab Zone) decided this in the meeting chaired by its
chairman Zaka Ashraf here.
The participants of the meeting were of the unanimous view
that the deepening crisis has led to total collapse of the
sugar industry and now the industry appears to be not in a
position to start the next crushing season that was to start
on November 27.
The meeting noted with concern that the low sugar prices do
not even cover the cost of sugarcane and production cost. Each
mill in the province has suffered minimum cash loss of Rs 150
million, which cannot be even recovered in the next five to
six years even if the government formulates industry-friendly
policy, it remarked.
It strongly criticized the surplus import of sugar into
Pakistan when the Economic Committee of Cabinet (ECC) reduced
the import duty on June 18, 2001 from fifteen per cent to ten
per cent in spite of the directives by the President Gen.
Pervez Musharraf for increase in the duty from fifteen to
twenty per cent.
The meeting condemned the ECC decision to continue with the
sugar import and said that it was done at the time when the
country did not require importing the commodity and domestic
requirements had been fulfilled with the import of six lakh
tons of raw sugar.
“This reduction in the import duty has sabotaged the efforts
of the President to revive the industry and economy of
Pakistan as it has cost the exchequer three hundred million
dollars,” the meeting said. The participants of the meeting
viewed with great concern that due to the glut in the open
market and the sugar lying in the godowns, the
prices fell to almost Rs 700 bag, which is highest crash in
the history of the industry.
“Such crisis had never been witnessed with such policies ever
before.” The meeting expressed great surprise over the fact
that in July 2000 the country was exporting sugar with similar
stocks in the country while with the similar stocks in 2001
the present economic managers decided to import the commodity.
The only option by which the government can help survive the
industry is that the Trading Corporation of Pakistan purchase
two to three lakh tons of surplus white sugar lying with the
sugar mills and export it at a reasonable price, the meeting
suggested.
November 21, 2001
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