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Conflict of
interests, cane crushing delays in Sindh
 After
an inordinate delay of more than 45 days, nearly two dozen
sugar mills out of 29 in Sindh have started crushing sugar
cane from November 15. Normally the sugar season should
commence from October 1 and continue till end-March. But
this year, too, like the previous years, cane crushing was
delayed because of the conflicting positions taken by the
millers and growers on sugar cane prices.
Millers are not ready to pay Rs67 for 40 kilogram of sugar
cane to the growers. Growers want Rs70 for 40 kilograms. One
of the millers contended that after paying government taxes,
the ex-mill sale price of one kilogram sugar is even less
than the buying cost of the sugar cane. Financial cost,
utility charges and transportation further add to their
losses. They fear huge losses and default on bank loans
In this conflict of titans--as both millers and growers
represent powerful political and business interests-- the
only victims are helpless consumers now paying as much as
Rs35 — 45 for a kilogram of sugar. Sugar was sold at Rs23 in
the year 2005 and within two years, the prices have
increased by more than 100 per cent. Sugar mill workers too
suffer because of the seasonal nature of their jobs.
The crushing season was delayed as millers took a position
that carryover stocks are sufficient to last till November.
But by first week of November, only one out of 29 mills in
Sindh indicated to begin crushing.
The Sindh Cane Commisioner, Mr Baaz Junejo then issued
notices to 20 mills under the relevant law. Cases were filed
against nine mills in the court. Two mills reported
temporary repair and maintenance shut down while a new mill
at Ghotki is about to commence its operations sometimes next
month. ‘’Some 27 mills will be in operation within a week to
10 days’’, the Cane Commissioner informed who expects a
production of more than one million tons of sugar this
season. Sindh’s requirement of sugar is about 0.7 million
tons while the remaining quantity is sold out to Balochistan
or NWFP. On occasions, excess sugar is exported too.
But millers complain of sugar flowing from NWFP and Punjab
into Sindh. The sugar imported by Afghanistan is finding its
way into NWFP and finally reaches Karachi-- the biggest
buying centre of the country. The sugar imported from India
is also trickling down in Sindh from Punjab. But there is no
quantification of this inflow of sugar. The Cane
Commissioner said that it was the federal government’s
responsibility to assess the inflow of sugar from other
countries into local market.
The millers are understood to have given their estimate of
sugar inflow into Sindh through Pakistan Sugar Mills
Association but are not ready to share this figure with the
media. Analysts predict a sugar crisis as witnessed in the
year 2005-06 when sugar was scarce and prices shot up. This
year, the Trading Corporation of Pakistan (TCP) utilised its
imported stock to maintain a steady supply during Ramzan and
consumers were somewhat spared of high price rise.
Nonetheless, sugar prices are still close to Rs40 a
kilogramme.
The officials and growers say that delay in crushing by mill
owners was intended to force growers to bring sugar cane
prices down to Rs63-64 for 40 kilogram. An official who was
involved in drawing up a price fixing mechanism through
discussion with the millers and growers during September and
October blamed the millers for being ‘’too obstinate’’.
Growers ridicule millers, who they say, are in habit of
rejecting every price-fixing mechanism but subsequently in
the season when many of these mills foresee growing demand
for sugar in the market, these go for buying spree. Last
year, the millers were not ready to accept Rs60 for 40
kilogram of sugarcane. But as they saw a rising demand for
sugar in the market, the millers breached an agreement
reached at the forum of their association and pushed up
prices beyond Rs115 for 40 kilogram.
“They will pay more than Rs67 this season too’’, Syed
Qamaruzzaman Shah, the President of Sindh Chamber of
Commerce replied on telephone when asked if delayed cane
crushing by the mills affected growers at all. Qamaruzzaman
Shah said that delay has affected wheat sowing. Wheat
production may be lower than projected for the next crop.
The growers blame millers for delaying the cane crushing and
thus forcing them to leave crop standing in the field.
Both the government and growers blame millers for concealing
data and information of sugar stocks. In 2006, the Monopoly
Control Authority and National Accountability Bureau moved
swiftly to take action against 42 sugar mills of which 16
were from Sindh. The NAB submitted a list of those mills
belonging to eight ministers of outgoing government and to
Nawaz Sharif family that stocked sugar. The Monopoly Control
Authority too imposed fines from Rs0.1 million to Rs10,000
on 32 mills which failed to comply with instructions of
posting Authority with updated information and data on
production and stocks.
All said and done, the crushing this season begins amidst
conflicting reports. The millers expect losses in their
business and hence the possibility of default on bank loans.
Market analysts believe that with the carry over stocks
about to finish and delay in cane crushing, prices of sugar
will go up. The consumers are set to suffer.
Courtesy: The Dawn
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Pakissan.com;
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