LAHORE: The Pakistan Sugar Mills Association (PSMA) Punjab has written to Punjab CM Shahbaz Sharif, demanding bring down sugarcane support price to Rs153 per 40-kg from the current Rs180 in line with the Sindh govt which has fixed the price at Rs155 per 40-kg.
The sugar millers have also threatened to stop crushing if their demand is not accepted.
The association was of the view that the Sindh govt has cut price of sugarcane to Rs155 in line with the market rate of sugar to ensure breakeven of industry and timely payment to growers. The letter said that the reduction would enable Sindh sugar mills to have cost benefit advantage of Rs7.11 per kg of sugar, rendering the mills in Punjab highly uncompetitive and necessitating forced closure.
The Sindh government resolved the sugarcane support price issue after a number of meetings with growers bodies and millers association, creating a consensus among them to rationalize the rate of cane at Rs155 per 40kg.
According to reports, the Punjab govt’s unilateral fixation of sugarcane price at Rs180 per 40kg has created a purchase price difference of Rs25 per 40kg within a country by sugar mills, rendering the Punjab industry uncompetitive within the country.
However, now the Punjab mills owners have threatened to stop crushing unless sugarcane price is fixed in line with the support price of Sindh at Rs152 per 40kg despite the fact this rate does not match with the current sugar price of Rs49 per kg either. According to the PSMA Punjab, the millers are already not in a position to retrieve cost of sugarcane to make payment to grower at a notified price of Rs180 per 40kg. The association urged the Punjab govt to revise sugarcane price to Rs153 per 40kg to provide a level-playing field and facilitating mills to continue crushing without any disruption.
It is to be noted that the Sugar mills, under the law, are bound to crush all cane produced by the growers but government does not care for the mills when they face over-production.