Crisis in sugar industry

EDITORIAL (November 26 2002) : The Sindh government is reported to be contemplating legal action against the sugar mills in the province, which are alleged to have deliberately delayed commencement of sugarcane crushing in the current season.

Traditionally, the crushing season in Sindh starts in the first week of November each year because the cane crop in the province stands fully ripe for harvesting by the end of October and therefore the mills themselves hasten to commence sugar production as early as possible.

It is in the interest of the sugar mills to increase production by procuring maximum quantity of sugarcane from the adjoining areas. It is also considered usually beneficial and profitable for the mills to avoid delays in the procurement of sugarcane and to buy their requirements by the month of April because the onset of summer leads to drying-up of sucrose content if the crop is left in the field without harvesting.

Contrary to the normal considerations and usual practice in the sugar industry, this year the situation appears to have taken an ugly turn. The mills are reported to be left with a fairly sizeable quantity of unsold stocks of the sugar produced in the last season.

The permission recently given by the government to the sugar mills to export initially 100,000 tonnes of sugar is yet to be availed of. The main obstacle is reported to be the low prices of sugar in the international market. As such the sugar mills are unable to compete in the export market without any official support in the form of a subsidy.

Thus the problem of unsold stock of sugar is seen to be the main cause of the present idleness of the mills in Sindh despite the plentiful availability of sugarcane in the province. According to an earlier report, the delaying crushing in Sindh is based on a pre-planned decision of the Pakistan Sugar Mills Association, and the individual sugar mills are not to be blamed for to keeping their machines idle. However, the sugar mills in Punjab are reported to have started crushing notwithstanding the problem of excessive surplus stocks of sugar from the last season.

Now notices have been reportedly served by the Cane Commissioner of Sindh on sugar mills under the Sugar Factory Control Act of 1950. In case the sugar mills fail to give satisfactory explanations of the causes of delay in the commencement of cane crushing, the cane commissioner would file cases against the proprietors of the sugar mills in courts of law.

On the other hand, it may be pointed out here, the federal government is giving due attention to the problems of the sugar industry which is the second largest after the textile industry in the country. The intervention by the provincial government is likely to antagonise the entire sugar industry to the detriment of relationship between the private sector and the government. 

Meanwhile, reports also indicate that quite a few sugar mills in Sindh remain completely closed with no signs of readiness to resume operations in the current season. This situation reflects a serious crisis. There can be no two opinions that the sugar industry deserves better deal from the federal government for the solution of its problems so that the current crushing season could be made fully productive.

On the contrary, the prolonged idleness of sugar mills would lead to wastage of the standing sugarcane crop and entail loss of income to the cane growers. It may be pointed out here that the sugarcane grown in Sindh is known for high sucrose content of about 10 to 12 percent in many areas as compared to an average of 8 percent in Punjab and even less in the NWFP. The setback to the sugar industry in Sindh as threatened by the current trouble, undoubtedly would be a blow to the prospects of capital formation and the process of industrialisation.




Source: Business Recorder