Ministry unravels sugar mills’ bid to jack up rates

The federal government has rejected the allegations levelled by the Pakistan Sugar Mills Association (PSMA), saying that based on the date provided there is no shortage of sugarcane and the crop is not being sold at Rs300 per 40 kilos as stated in a letter written to the prime minister a week ago.

“According to the bank receipt issued to the farmers, sugarcane was bought at an average price of Rs220 per 40 kilos,” the Ministry of Industries and Production stated in response to the PSMA letter.

In its letter, the PSMA had blamed the sugarcane growers for selling them the crop at higher than the government’s rate of Rs200 per 40 kilos and feared that it would push the sugar prices over Rs100 per kilo. However, the All Pakistan Farmers Foundation chairman rejected the PSMA’s allegation and said that the mills “are trying to blackmail the government”.

The ministry’s letter titled ‘mismanagement of sugar sector of economy’ – signed by Cost Accounts Officer Muhammad Yasir Iqbal – was somewhat in line with that of the farmers that early start of the sugarcane crushing season was a deliberate move by the sugar mills aimed at selling sugar at high prices, adding that in Punjab, the cane commissioner confirmed the availability of the crop before the start of crushing in the region.

It stated that the owners of 12 sugar mills met Federal Minister for Industries and Production Hammad Azhar on October 8, 2020 to start early crushing. “The current chairman of the Sugar Mills Association also supported early crushing.”

It stated that the sugar mills’ claim of unavailability of the crop was not based on facts.

According to the Punjab cane commissioner, 359,000 metric tonnes of sugarcane was crushed in November. The sugar mills’ allegation of “a loss of 300,000 metric tonnes of sugar due to a 15-day early season is simply incomprehensible”.

The PSMA had said in its letter that the cane commissioners of all the provinces had failed to uproot middlemen due to which the sugarcane price reached up to Rs300 per 40kg.

It stated that the sugar industry was directed to commence crushing season 15 to 20 days before the designated date of November 30, 2020 as per the Sugar Factories Control Act 1950, adding that as a result, the low recovery of sugarcane has deprived the country of approximately 300,000 tonnes of sugar.

All Pakistan Farmers Foundation Chairman Syed Mehmood Ahmad Bukhari rejected the allegation, saying that the PSMA was trying to blackmail the government.

“Sixty per cent of the sugarcane was bought by the mills at Rs200 per 40 kilos,” Bukhari said, adding that they (mill owners) increased the rate for three days and started creating a ruckus.

He accused the mill owners of exploiting farmers as well as the people. “After production cost and profit, sugar should be available to the people in the market at Rs65 per kilo.”