Sugarcane crop: Sindh govt orders mills to start crushing by month-end

Agriculture minister says minimum price issue will be resolved soon

KARACHI: The Sindh government has ordered sugar millers to commence crushing by November 30, but it has not yet set a minimum sugarcane price to be paid to growers.

Chairing a meeting of the Sindh Sugarcane Board, Sindh Agriculture Minister Muhammad Ismail Rahoo said the government would soon resolve the price issue but for the time being it had decided that sugar mills should start sugarcane crushing before November 30.

“We will soon issue a notification for the sugarcane price,” he said.

The meeting, held at the Sindh Secretariat Karachi, was attended by Agriculture Secretary Agha Zaheeruddin, members of the Sindh Chamber of Agriculture Kabool Khatian and Nisar Hussain Khaskheli, Pakistan Sugar Mills Association (PSMA) Zonal Committee Sindh Chairman Asim Ghani and sugarcane board members.

Growers wanted the provincial government to fix the price at
Rs200 per 40 kg keeping in view their expenses while the board suggested a price of Rs180 to Rs182.

The Agriculture Department of the provincial government put the per-acre cost estimate for the crop at about Rs100,000. However, the growers argued that inflation had gone higher and with that the peracre cost reached about Rs130,000. An acre of land gives approximately 650 maunds of sugarcane.

In the meantime, the Punjab government has set the sugarcane price at Rs180 per 40 kg and according to the previous record, the Sindh government has mostly fixed a price that is higher by Rs2.

Highlighting their concerns, the sugar mill owners pointed out that although the Sindh government had given them subsidy, the federal government had not yet provided the agreed subsidy on sugar exports in the last season, which was creating hurdles in the way of entire chain of their business. Sugarcane is one of the major crops of the country, which provides livelihood to millions of households.

In fiscal year 2016-17, the production of sugarcane rose to a record 73 million tons. Sugarcane crushing reached 71 million tons, resulting in production of seven million tons of sugar, according to the 2017 annual report of the Pakistan Sugar Mills Association (PSMA).

Besides sugar, sugarcane produces some byproducts such as bagasse which the sugar mills use to generate electricity. Sugar is mostly used in confectionaries. Despite being an important crop of the country, in every season the price issue remains a main sticking point. Growers complain that sugar mills have made a cartel to manipulate the prices.

Sugar mills also intentionally delay the crushing process so that the sugarcane is dried thus it weighs less but gives the same amount of sugar.

Last year, there were strikes and clashes between the growers and mill owners on the issue, said Khaskheli. “Growers burnt about 20% of their crop when they did not get the right price.”

Growers at the board meeting called for fixing the price according to the Sugarcane Act, which states that mills will not buy sugarcane from middlemen (who can manipulate the price and can easily dodge law), he said.

Sugar mills will not pay in cash, instead they will pay through cheques so that the process of payment remains transparent and if mill owners delay payments they will have to pay 15% interest, he said. “Previously, they have held up our payments for one to two years.”