KARACHI: Pakistan Sugar Mills Association (PSMA) has decried the failure of government at controlling prices of sugar and cane.
Chairman PSMA Aslam Faruque has said that the sugar mills are being operated under the Cane Act and the provincial governments decide the prices of cane without considering its impact on cost of sugar and the end price and the federal government only resorts to imposing sales tax on products.
Faruque claimed that the association always suggested that the government decrease the cane prices to control sugar prices. The provincial governments asserted that it was not their prerogative, as the federal government was responsible for the cost of sugar.
He said that sugar mills owners were helpless as the government has ordered to produce excessive sugar. “Power and textile sectors were subsidised but the sugar mills were given only a Rs3 billion subsidy, while the sugar industry paid Rs300 billion annually for the payment of cane,” he said.
If politicians had any influence over pricing, cane prices would be much lower. The chairman added that the Punjab government had decided the cost of production of sugar was Rs63.72 when the cane price was Rs180 per tonne, while the sugar price was Rs55, adding that the Punjab government had set sugar prices at Rs70 per kg.
He pointed out that in January 2017, the retail price of sugar was Rs64.80 but after the bumper crop of cane, prices decreased as much as Rs50 per kg. Faruque said the mills had a surplus of more than two million tonnes, and asked the government to export it, but they were not allowed. That delayed payments to cane growers.
The Punjab government had requested to the federal government on April 15, 2019 to put a ban on sugar export, while in a sugar advisory board meeting, the mills owners were told that only 22 paisas was increased in sugar prices during the period of January 2017 to April 2019, adding that in January 2017, the sugar prices declined from Rs64 to Rs50, but soon recovered.
The chairman said the sugar mills would go bankrupt if cost was not recovered. The cost of sugar production was proportional to US dollar price. The government had wisely decided to export sugar in October 2018.
He said that the federal government said refused subsidy saying it had no money after the 18th Amendment. If the mills produced 15 per cent sugar, then they could export 10 per cent of it. He added that the mills in Sindh had an advantage in exporting sugar.
